MONMOUTHSHIRE council could lose nearly £2 million of funding after abandoning Chepstow's controversial one-way system.

The council received £1.7 million of European and Welsh Development Agency cash to pedestrianise in the town centre.

But the one-way traffic system, a central part of the plan, brought Chepstow to a grinding halt and nearly led to the collapse of many businesses.

The council was forced to abandon the scheme after just nine days, and there are now concerns that the funding bodies will demand their money back.

The local authority is trying to convince them that their new plan can still achieve the original aims.

Project manager Chris Jones said: "We have been in dialogue with the Welsh Development Agency and the Welsh European Funding Office about the status of the funding now we have switched back to a two-way system.

"We expect to hear from them in the next fortnight. Every other part of the scheme, the artwork in the street and so on, remains the same."

Now local Assembly Members want more consultation with residents and traders in the town to ensure that the new scheme is a success.

South Wales East Assembly Member William Graham said: "The one-way system was totally chaotic and did real harm to the traders in the town. The council need to consult local people much more carefully and come up with a workable scheme that will retain the funding."

Monmouthshire AM David Davies said: "The original scheme was not properly thought through and local people's concerns were not taken on board.

"More careful listening has to go on to ensure that there is no further disruption."

Meanwhile, one trader, Greg Lance-Watkins, is due to meet chairman of the regeneration committee Cliff Meredith to discuss his own plans for the town centre.

Mr Lance-Watkins said: "It would be better if the council accepted its mistakes and the damage done by its refusal to consult properly, and consider an alternative to give us a centre to be proud of."