Heather Mills has struck a £1m rescue deal for her vegan food business after accusing the “gaslighting” meat industry of triggering a decline in sales.

VBites has been bought out of administration a month after its collapse, with Ms Mills vying to rebuild the business after fending off five rival bidders.

The company was pushed to the brink after it was hit by soaring costs and shoppers trading down to cheaper vegan alternatives, according to a report from administrators at Interpath.

VBites had debts totalling more than £8.3m at the time of its collapse, having racked up losses of £3.1m in the year to March 2023.

Despite the rescue deal covering the company’s assets, including factories in County Durham and Northamptonshire, it did not protect VBites’ remaining 64 staff who were made redundant.

However, Ms Mills has since vowed to rehire 40 workers.

In comments made on social media, Ms Mills said VBites was forced into administration “unnecessarily” with just three days’ notice.

She added: “This is why I have chosen to resurrect the company myself, at great personal expense, and take control of the operations, personally moving back to the North East to ensure we are still able to make a positive contribution to the future of our global food economy.”

VBites was founded in 1993, manufacturing a range of plant-based products including sausages, burgers and fish fingers. It previously served as a supplier for McDonald’s.

Ms Mills lashed out at “corporate greed and poor management” when the business collapsed in December, while also criticising celebrity campaigns promoting dairy products and the meat industry.

She said: “Many of the campaigns we are seeing such as the ‘Got milk’ campaign by the dairy industry, joking about plant milk, insulting lactose intolerant people as well as ethical environmental animal lovers, are well-funded gaslighting initiatives that detract from the facts and sow the seeds of doubt in consumers who deserve to know the truth.

“The plant-based industry needs to take a lead from the dairy industry in unifying its voice but as a force for good and promotion of the facts – as opposed to a litany of lies and misinformation.”

Ms Mills first experimented with a vegan diet as an alternative therapy to traditional medicine and has said that removing animal products from her diet helped her recover from the 1993 traffic accident that caused the loss of her left leg.

VBites was just one of several vegan food businesses that encountered difficulties last year amid a slowdown in demand for plant-based alternatives.

Meatless Farm collapsed in June and was bought by a rival vegan company VFC. Yorkshire sausage company Heck was also forced to slash its range of vegan sausages from 15 products down to two last year after demand waned.