Intel Executive Vice President David Perlmutter has bluntly told the Israeli government that however much it pays the chip maker to set up a new plant in Israel will decide if the project goes ahead.

Intel and Israel have had a long love affair of grants and establishing plants. At present the company is the country's largest private employer in the high-tech industry, with more than 7,000 employees, and it is also the largest exporter, with exports of two billion dollars in 2009.

However Perlmutter told YNet that the Kiryat Gat plant needs upgrading. Intel asked for a $405 million grant, as part of an overall investment of $2.7 billion that it is implementing. He is quoted as saying that the grant has a great deal of importance in decision making. It is important for me to clarify that the decision on the grant will have a deciding influence on whether we establish the plant here or not.

“Intel has other alternatives," Perlmutter noted. It is a veiled threat as the Israelis have not come up with the cash yet and the claim that Intel could take its factory plans and run might make the country break out in a cold sweat.