BRITAIN'S biggest bioethanol plant has been given the go-ahead as part of a £250m plan to make the North-East the future fuels capital of the UK.

The plant - which will create hundreds of jobs - will be the first of its kind in Britain and represents the largest investment at Teesside's Wilton site for 17 years.

It will convert 1.2 million tonnes of wheat a year into ethanol - a clear, colourless, high-octane liquid that can be blended with petrol for use in cars and lorries.

About 800 jobs will be created during the plant's construction and a further 100 permanent positions will become available when production begins in 2009.

The plant will produce 400 million litres of ethanol a year.

The company behind it, Yarm-based Ensus, already has a supply deal with the Anglo-Dutch oil company Shell.

The company hopes to buy crops locally. About 150,000 hectares of land will be needed to grow the wheat.

Ensus, which has secured financial backing from private investors The Carlyle Group and Riverstone Holdings, believes the demand will sustain about 1,500 farming jobs.

The company, which is led by former ICI executive Alwyn Hughes, said in November that it intended to raise money for the ethanol plant through a listing on London's junior stock market, the AIM.

But last month, Ensus admitted it was considering other financing options.

Chairman Sir Rob Margetts said yesterday: "It was important for us to find backers who shared both our passion for the industry and desire to develop Ensus as a company.

"The financial resources of Carlyle and Riverstone, together with their experience of investing in biofuels in North America, makes them the ideal partners as we seek to create one of the leading biofuels companies in Europe."

Teesside is already home to a number of bio-diesel companies, such as D1 Oils and Biofuels Corporation, but until now has not secured a bioethanol producer, although interest has been shown by Vireol - based in

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