CONTROVERSIAL plans for a gas-fired power station in Blaenau Gwent have been thrown in to doubt.

American-based company Enron - the firm which wants to build the power station in Rassau - announced yesterday that it was on the verge of bankruptcy because it cannot meet its debts, which run in to billions of dollars.

The company was planning to build a £400 million gas-fired power station on Rassau industrial estate.

Company spokesman Alex Parsons told the Argus: "It is too soon to say how the implications of recent events at our company's headquarters in Houston will affect our operations in Europe. "We will just have to wait and see, and that is all I can say at the moment." The project was greeted with a storm of protest from Rassau residents who were concerned about the environmental and visual impact of a 1200-megawatt plant being built in their community.

And many people were sceptical about the number of jobs which would be created by the power plant. Enron claimed 150 jobs would come to the area - but protesters believed the number to be much lower, based on similar plants around the UK. When the proposed power plant went before a meeting of Blaenau Gwent councillors in September it was unanimously rejected and referred to a public inquiry on the grounds of the visual consequences.

The Department of Trade and Industry is in the process of deciding whether to ratify the public inquiry.

But the latest news casts a heavy shadow over the future investments of Enron. David Blanchard, of the Rassau Residents Association, said: "We are all hopeful that latest news will lead to the end of Enron and the end of the project for Rassau.

"The residents of Rassau are still on tenterhooks about the project, but everyone is a little bit more confident of the plans being put to bed for good."

Mr Blanchard said the residents association was also heartened by a recent report from a government think-tank which recommended all large-scale power station projects be rejected.