A BIOFUELS company has confirmed it is poised to build an £80m plant on Teesside, creating 70 jobs.

North Yorkshire-based Vireol hopes to raise funds by floating on London's junior stock market, the AIM, in the autumn, and plans to start building the plant at the beginning of next year.

The plant will turn wheat into ethanol, which can then be used to power vehicles.

Previously, Stokesley-based Vireol was considering either Teesside or Humberside for the location of its plant.

The company, set up in September last year and which employs five people, is now hoping to build a plant in each location.

Chief executive Andrew Hartley said: "We are just looking very hard at our plans now and really we are keen to do both.

"Hopefully, there will be others to follow as well. We are just finalising our plans now, over the next couple of weeks."

Mr Hartley said he would seek permission for the first plant by the end of June, once negotiations on the land were complete.

Each plant is expected to produce 150,000 tonnes of bioethanol each year. The ethanol can be blended at up to five per cent with conventional petrol and used in conventional vehicles, or at higher ratios in flexible fuel vehicles.

By 2010, the Government has set targets that renewable fuel has to account for five per cent of all road transport fuel in the UK.

Funding for the plants will come from a combination of banking facilities and equity from the flotation.

Mr Hartley said Teesside had been chosen because of its good infrastructure, with a large port and relevant expertise for the renewable energy market. Wheat, the feedstock for the plant, is grown in large quantities on the east coast of England, from Northumberland down to the Thames.

Vireol was set up by Biofuels Corporation founder Max de Grussa, along with Mr Hartley, Ged Russell, and several partners of Stockton quantity surveying firm Baker Mallett.

Baker Mallett, which oversaw construction of the Biofuels Corporation's plant at Seal Sands in Teesside, will manage the project.

Michael Thomson, partner at Baker Mallett, said the project was one of the largest wins for the company.

He said: "Following on from the completion of the £35m biodiesel plant at Seal Sands for Biofuels Corporation, we are extremely pleased to be appointed to carry out the project management and co-ordination services for another ground-breaking project in the renewable fuels sector.

"We are working hard to develop this area of business and anticipate that we shall be appointed on several further projects in this sector in the next 12 months."