YESTERDAY it was announced that Northrop Grumman will set up in Oakdale business park and create at least 250 jobs if it wins an £800 million Ministry of Defence contract.

The US company is leading one of two consortia competing for the Watchkeeper contract, and the MoD is expected to make a decision this autumn.

Watchkeeper will enable tactical units to collect and share intelligence via "spy planes" - unmanned reconnaissance systems - to allow field commanders to detect and follow activity without having to send troops into dangerous areas.

Los Angeles-based Northrop Grumman is a global defence company, with 120,000 employees in 25 countries, which had total sales of $26 billion in 2003.

Oakdale business park was once home to a colliery which employed thousands, but it became derelict after it closed in 1989.

A major land reclamation project transformed it into the largest development opportunity of its kind in the South Wales valleys at the start of the 21st century.

General Dynamics located part of its £1.7 million MoD communications system at the business park in 2002 and will be a key member of the Watchkeeper team. Tom Vice, a senior vice- president with the company, said: "More than 90 per cent of the staff at our headquarters systems centre will be recruited locally from Wales and the UK.

"These will be highly skilled engineering, systems integration and software development posts. We would also anticipate that the project could generate up to an additional 2,000 jobs as we develop local supply chains."

Larry Johnson, president of General Dynamics UK, said they were delighted they had taken the decision to base their headquarters in Oakdale.

"We have been able to recruit high-calibre staff locally and would be looking for more to work on the Watchkeeper programme if the Northrop Grumman bid is successful."