THE future of the world's largest biodiesel plant was thrown into doubt yesterday as the company behind it suspended trading on the stock exchange and went into crisis talks with its funders.

The Biofuels Corporation, which was due to open its £21m plant at Seal Sands, on Teesside, before the end of the year, said trading in the company's shares had been stopped until its financial position had been made clear.

It is understood Biofuels, which is listed on London's junior stock exchange, is in urgent discussions with funders about its future.

Despite this, The Northern Echo understands Biofuels has still not taken advantage of a £1.2m grant offered to it by One NorthEast last year to build two plants in the region.

Last night, the regional development agency confirmed that the grant had been accepted by Biofuels, but it said the company had not drawn the money.

When Billingham-based Biofuels cut the turf on its new plant a year ago, it said it would put the North-East at the heart of the potentially prosperous renewable fuel industry. Its plant, which converts palm oil into fuel, is due to be commissioned by the end of the year, almost three months later than expected.

In an announcement to the stock exchange, it said: "Biofuels announces that dealings in its shares have been temporarily suspended at the company's request, pending the conclusion of discussions with its bankers and equity providers regarding its ongoing funding requirements.

"The future viability of the company is dependent on the successful conclusion of these discussions."

Dermot Roddy, of Renew Tees Valley, an organisation that aims to attract renewable energy companies to the region, said: "I was very surprised to hear about this. I visited the plant just last week and I have to say it is an excellent asset.

"It was all finished, and the commissioning was almost complete, so I don't know what has happened."

Several biofuels companies are carrying out feasibility studies into the possibility of building more plants at Teesside.

Mr Roddy said he did not believe Biofuels Corporation's announcement would affect that.

He said: "The Tees Valley is still an excellent place for the renewable energy industry. This isn't going to change that."

In September, Biofuels announced it had signed a deal with a blue-chip power generating group, which wanted to use its fuel in gas turbines. It also said it had customers for 80 per cent of its output.

In July, the company posted a £10m pre-tax loss, but said that would change once production started. It also had plans to build a second plant on Teesside.

l Two Cabinet ministers have thrown their weight behind a ten-year strategy to invest £4.5bn in the North-East's chemical, pharmaceutical and biotech sectors.

Industry Secretary Alan Johnson and Chief Whip Hilary Armstrong, the MP for North-West Durham, attended the launch of the North East Process Industry Cluster (Nepic), in London.

Nepic wants the Gov- ernment to boost investment in transport, science, education and skills and training to keep pace with its plans to spend £4.5bn on new projects.