The Scottish Environment Protection Agency (Sepa) says flies have been attracted by a material recycling plant run by Oran Environmental Solutions. A number of residents claim they have been bitten by the flies.
Sepa has made 43 site inspections and issued seven enforcement notices between April last year and July this year, partially suspending the licence twice. The agency will now station two staff in a temporary Falkirk Council office to monitor the situation.
Oran chief executive Tom Gleeson has previously apologised to residents for a delay in getting improvement works running effectively. He insisted a new £3 million plant for sorting out waste which began operation in March had improved things.
However, Sepa said that since the middle of this year the numbers of flies have increased on site and warned that if improvements are not delivered within required timescales then enforcement action will be taken.
Mr Gleeson said the company was working "very closely" with Sepa. "We have worked extremely hard to rectify the situation and we have rectified it," he added.