Lilian Pallikaropoulis challenged the Environment Agency over a decision to allow the Cemex factory to increase the amount of tyres burnt for fuel in 2007, arguing that people's health would be affected by emissions from the plant.
However, she failed in a judicial review to get the decision overturned, and will now have to pay ВЈ32,000 in court costs and ВЈ56,000 to the Environment Agency.
Pallikaropoulis said she had already paid out ВЈ70,000 to cover her own legal costs, and may have to remortgage her house, reported BBC Warwickshire.
However, she said planned to fight on, and was thinking of taking the case to the European Court of Justice.ADVERTISEMENT
Pallikaropoulis said: "This has been rather daunting because I was only representing the people of Rugby. It was a public interest case and many people in Rugby are concerned."
A spokeswoman for Cemex said that "certain emissions had reduced" when tyres were used as fuel at the plant. According to a trial carried out by Cemex, the index used to measure emssions from the main stack improved by 33% after increasing the use of tyres from three to six tonnes per hour. This include a reduction in emissions of nitrogen oxides by 26%.