MONTREAL - The quest to revive one of Canada's last asbestos mines -- and possibly save the embattled industry -- is destined for failure, says a Quebec politician who hopes the sector will be shuttered for good.

Opposition politician Amir Khadir said Friday that a credible source has told him that financial institutions refused to provide a critical loan to the company trying to relaunch Quebec's Jeffrey Mine.

The Quebec government has offered to give the mine a controversial $58-million bank-loan guarantee if Balcorp Ltd. can meet certain criteria -- including raising $25 million from investors.

"We consulted a former vice-president of a big financial institution, and according to him, on its face the business plan did not correspond to any logical market criteria," Khadir told a news conference in Quebec City.

Khadir, a member of the small left-wing Quebec solidaire party, said it's time for the province to pull the plug on the loan-guarantee offer, which has been on the table for more than a year.

The mine, located in the town of Asbestos, suspended production of the fibrous substance last year due to financial problems. The industry's attempt to kickstart production has been pummelled by an international anti-asbestos campaign led by physicians, activists and asbestos victims.

Khadir is one among a chorus of critics who say the mine is responsible for exporting the hazardous mineral -- and its health risks -- to poorer countries where safety conditions are suspect. He disputes the notion that the once-thriving industry must stay alive, for the sake of the regional economy.

"At a time when we send satellites to planet Mars..., at a time when we spend billions of dollars on all sorts of projects, why are we not capable in Quebec of offering the Asbestos region a way develop its economy without producing and exporting death?" Khadir asked.

Jean Charest's government downplayed Khadir's claims on Friday.

A spokesman for Economic Development Minister Sam Hamad noted that Balcorp must also show the government -- via independent inspections -- that the product is being used safely by clients. This is on top of the $25-million investment, Harold Fortin said.

"It's still being analyzed on our end," Fortin said. "If we haven't announced what we're doing yet, it's because we still haven't checked certain things.

"I don't consider the project dead until the two criteria are 100-per-cent impossible to satisfy."

Publicly, the asbestos sector has been optimistic about its future.

Balcorp president Baljit Chadha indicated last fall that he was close to securing the necessary funding from an international consortium of investors.

Jeffrey Mine president Bernard Coulombe has said some preparatory construction work has already been completed in anticipation that the deal will come through. In recent days, he's said he expects production to resume before the end of the year.

Industry proponents insist the substance can be handled safely, even in developing countries where the bulk of Canadian asbestos exports are shipped. They also contend the type of asbestos mined in Quebec -- called chrysotile -- is not as dangerous as other forms of the mineral.

But the public-relations battle has been devastating for the industry, Coulombe admitted in a recent interview with The Canadian Press.

As a result, he said finding money has been difficult.

"We are so criticized, so misunderstood, so tarnished," Coulombe said.

"We're waiting with hope that it will be positive."

- With files from Patrice Bergeron in Quebec City