THE company building a biodiesel factory in the North-East said last night that it would start production at the end of this month.

The Biofuels Corporation, which chose Seal Sands, Teesside, as the site for one of the world's largest biodiesel plants, was due to start in September but has been hit by a series of delays.

In a statement to the stock exchange yesterday, it said: "The board of Biofuels confirms that the timetable set out in December 2005 for the commencement of production of biodiesel by the end of February 2006 remains, subject to any unforeseen circumstances, on track."

It said the company had total funding of about £92.9m, enough to see it through to full production.

In November, Biofuels suspended trading of its shares on the junior stock market - the Alternative Investment Market (AIM) - and went into crisis talks with its bank.

It had lost a contract with its main customer, Petroplus Teesside, and delays to the commissioning of the plant meant costs were rocketing.

Barclays agreed to a rescue package with Billingham-based Biofuels and it resumed trading.

Biofuels' plant will refine diesel from rape seed or vegetable oil, once it is operational.

The company was set up by Australian businessmen John Nicholas and Max de Grussa, and raised £15m when it floated on the stock market last year. The pair remain shareholders, although Mr de Grussa left the company earlier this year and now owns a smaller share.