Sellafield Mox nuclear fuel plant to close. It's a headline that generations of Irish environmental activists, and government ministers in Leinster House, never thought they would see. After just 10 years of operation – and at the cost of a vertiginous £1.4bn to the British taxpayer – the mixed-oxide fuel plant nestled on the edge of bucolic west Cumbria is to be decommissioned.

Sellafield has long been an emotive issue in Ireland. At just 128 miles from Dublin, the plant is within spitting distance of Ireland's densely populated eastern seaboard. The Irish Sea is now the most radioactively contaminated in the world, while in the wake of 9/11 concerns about a terrorist attack on the plant briefly gripped the Irish popular imagination.

Unsurprisingly then, yesterday's announcement that the Mox plant is to cease operation has been welcomed by Irish activists, many of whom have been involved in decades-long campaigns opposing the facility. However, the closure is anything but the end of Sellafield's nuclear story.

Last October, the environment secretary, Chris Huhne – in a volte-face from previous Lib Dem energy policy – announced that eight new nuclear power plants are to be constructed across Britain. Only last month it was confirmed that Sellafield is to be the site of one such new reactor, to be built by 2025. It is widely expected that additional employment at the new facility will at the very least replace the 600 job losses announced yesterday.

The earthquake in Japan – and the crisis at Fukushima – have radically altered nuclear priorities across Europe: Germany is to phase out all its plants by 2022, opposition to nuclear power is increasing in France and Italy. But here the only demonstrable effect is the closing of a reprocessing facility that was, from the off, run on a faulty economic model.

The Mox plant was built to handle plutonium dioxide that was shipped around the world, through the Irish Sea to Cumbria, where it was to be recycled from spent fuel at the Thorp plant at Sellafield. The environmental implications, particularly in the event of a disaster, of shipping highly radioactive cargo around the world are all the obvious; the financial rationale is equally flawed.

Sellafield was designed to process 120 tonnes of Mox a year: in reality it produced barely a fraction of that. In the five years since opening in 2006 just five tonnes were made, and as of yesterday the total output over its lifetime stood at a paltry 13 tonnes . The loss of Japanese contracts in the aftermath of Fukushima sounded the plant's death knell.

As Irish campaigner Brian Greene, who blogs at Shut Sellafield , noted: "From a business perspective the Mox plant has been a total failure so it's no great surprise that they are shutting it down. But the legacy is huge. It'll cost millions to decommission, the land will never be used again."

Mox or no Mox, Sellafield will still pose an environmental threat. When the famous Calder Hall cooling towers were demolished in 2007 it took 12 weeks to remove all the asbestos from the debris. The site's radioactive legacy will last significantly longer.

Meanwhile, in May, British authorities backtracked on a commitment given to Irish environment minister Phil Hogan that Sellafield would be included in European-wide stress tests of nuclear installations following Fukushima. That the plant does not generate nuclear power was adduced, rather dubiously, to explain why an examination of Sellafield's resilience against earthquakes, tsunamis, air crashes and terrorism was unnecessary.

In 1981, the plant's name was changed from Windscale to Sellafield in an attempt to shift attention away from the plant's less than impressive safety record. Thirty years on it seems that, with the closing of the Mox plant, another attempted rebranding of Sellafield is underway.

But unless British government policy changes quickly, future generations on both sides of the Irish Sea still face the disquieting prospect a life lived under a nuclear shadow.