The closure of the West's only cement works last night sent waste chiefs back to the drawing board in their bid to solve a rubbish crisis in Wiltshire.

County waste bosses had been planning to burn much of Wiltshire's rubbish at the Lafarge cement works in Westbury – only to be scuppered by the closure, announced yesterday, of both kilns.

As well as the loss of the remaining 66 jobs at Lafarge, the closure has dealt a body blow to Wiltshire's long-term waste strategy – to build a special plant near the Westbury works to turn much of the county's rubbish into fuel for the cement kilns, rather than dump it in landfill. Now, waste chiefs are having to come up with a new strategy, but said they hoped the plans to burn the county's rubbish would not be abandoned.

Wiltshire's waste chiefs had got as far as unveiling the site and consulting with locals in Westbury over a treatment plant that would turn household waste that can't be recycled into pellets to feed the vast kilns at Lafarge.

Waste services manager Andy Conn said the closure was "a setback".

He explained: "The county council is searching for new ways of diverting Wiltshire's household waste from landfill. We need to make a contribution to the national strategy for reducing greenhouse gas emissions.

"One of our proposals is to send the unrecycled waste from western Wiltshire to a treatment plant proposed in Westbury. The main output from the plant would be a fuel made by drying and shredding the waste – a process generally known as MBT, or mechanical, biological treatment. Lafarge had shown a strong interest in using this fuel at the cement works, which was seen as a neat local solution."

But now that plan is on hold, as Lafarge announced it was closing the cement works, making about 60 people redundant, until the house- building industry picked up.

"The news is a setback, but it does not mean the need for more waste treatment goes away, or that the proposal should be abandoned. There is a large potential for fuel made from refuse," added Mr Conn.

"By coincidence, a report produced recently for the National Grid promotes the creation of gas from sources such as household waste to meet our needs for power as North Sea Gas reserves are used up. There are also companies interested in producing electricity from waste. We will need to review the proposal with its backer, Hills Waste Solutions, to decide the best way forward.

"Fortunately, the amount of waste is not growing as it was a few years ago, and recycling should top 40 per cent this year because of some great work by Wiltshire residents – we therefore have a little time to adjust our plans."

More than 40 jobs at the Lafarge plant had already been lost, and a number of associated local firms closed as a result. West Wiltshire council leader Graham Payne said: "This is a bitter blow for Westbury as these were good, well-paid jobs. It's a disaster for the town and for west Wiltshire as a whole."