SNP leader Alex Salmond believes it is "high time the government did something"

Scottish Nationalist Alex Salmond MP applauded the news but criticised the way events leading to the surprise announcement had been handled.

He said the government had been "playing poker" with Scotland and now needed to invest in the local area after it had been "used and abused".

Mr Salmond openly laughed at suggestions that the power plant was safe.

Alex Salmond claims Labour played "poker" with the plant

Energy Minister John Battle made the announcement saying that the Atomic Energy Authority (UKAEA) had advised him that there was "no economic case" for supporting the reprocessing work over the longer term.

At the same press conference, Secretary of State for Scotland Donald Dewar said the decision had been taken on the grounds of both safety and commercial viability.

He said: "What we want to do now is to bring the decommissioning process to an end as quickly as possible.

"The concern now is to ensure that we pass on to future generations a safe environment.

"We are deeply committed to caring for the environment and to taking action to deal safely with the difficult legacies from past operations at Dounreay."

The United Kingdom Atomic Energy Authority has said cleaning the site up could take more than 100 years.

Donald Dewar is focused on the future of Dounreay

Mr Salmond's criticism was echoed by Shadow Trade President John Redwood MP who said the government's nuclear waste policy was a "shambles".

Mr Redwood said: "First we are told that Britain has a safe facility to process the Georgian material.

"Then we learn that the nuclear inspectorate has closed that facility because it is unsafe.

Donald Dewar: "Decommissioning will now be the business of Dounreay"

"Next we are told that the facility will be improved so that work can resume. Now we are informed that the plant is to close in the long term anyway.

"This means taxpayers' money will be wasted on modernising a facility to carry fewer contracts.

"Then it will be shut down and a big public investment will be written off. The government's policy is a shambles."

Friends of the Earth Scotland were among environmental groups which welcomed the announcement.

Director Kevin Dunion said: "Today's news is a complete vindication of our position that Dounreay has been an environmental and economic folly from start to finish.

"The site now has the opportunity to develop as a centre of excellence for nuclear decommissioning, beginning with cleaning up its own contaminated legacy.