Around 500 jobs have been announced at the Highstar site on the Swansea Road in Merthyr Tydfil, and another 500 at a town centre development including a Tesco.

These two announcements show the private sector is committed to Merthyr as a regional base

Edward Bampton, WDA

Edward Bampton, from the Welsh Development Agency (WDA), said a huge project to regenerate the town had reached a crucial stage.

"Contracts have now been signed on these two major land deals which we anticipate to start on site in the next few months after the due planning process.

"We are very optimistic that, within a couple of years, we will have almost 1,000 jobs on these two sites."

Edward Bampton: 'Major investment'

Mr Bampton revealed that most of the jobs would be in the retail sector, but said he was confident the deal was "an excellent way of preparing Merthyr for further investment".

"These two announcements show the private sector is committed to Merthyr as a regional base."

He added that, if the regeneration project was going to attract investment from manufacturing or hi-tech industries, it was important to have investor confidence in the area.

Controversial plans

In June, detailed plans for the £250m scheme to create an entire new village in south Wales were unveiled.

But people living nearby vowed to fight plans to develop a wasteland site because it involves a major coal recovery operation.

The huge development promises to create two hotels, a shopping village, a country park, and a multiplex cinema.

A total of 1,700 houses would also be built on the 550-acre development alongside a business park.

Plans to move Merthyr's soccer side from their home in Penydarren Park to a brand new 10,000 seater stadium wer also mooted.

But the site just outside Merthyr town centre has been plagued by controversy.

Neighbouring residents were known to be firmly opposed to developments which could cause environmental problems, and they have successfully fought off a number of opencast mining applications.

They have indicated that they are very much against the latest proposals - because 200,000 tonnes of coal would have to be recovered before it could go ahead.

However the developers denied that opencast mining would be involved.