A NORTH-EAST plant to convert farm crops into fuel will be the largest in the world, it was revealed yesterday.

As work began on the £21m development at Seal Sands, Teesside, business leaders said they hoped that the project would put the North-East at the heart of the prosperous new renewable fuel industry.

Groundwork has begun on the world's largest biofuels production complex, which will produce up to 250,000 tonnes of fuel a year and create at least 45 jobs when it goes into operation early next year.

Billingham's Biofuels Corporation will produce fuel from renewable crops such as rape seed, before mixing it with mineral diesel.

It will then be sold by independent fuel distributors and supermarkets.

Road, rail and pipeline connections are now being put in place at the site.

Biofuels chief executive John Nicholas, who has led a team working on the development for more than two years, said: "The development, as well as generating significant numbers of jobs both directly and through supply chain opportunities, will, I am sure, act as a catalyst for establishing this region at the forefront of biofuel and other renewable energy technologies."

Alan Clarke, the chief executive of One NorthEast, which helped secure a £1.2m Government grant for the development, said: "This facility will create high-quality new jobs and reinforces the North East's drive to become the 'green fuel' capital of the country through its One Green Route programme, a network of garage forecourts which sell environmentally friendly biodiesel to motorists."

Neil Etherington, the marketing director of Tees Valley Regeneration and chairman of Renew Tees Valley, which was involved in securing the development, said: "The very fact that we can now boast of having the biggest biodiesel facility in the world here in the Tees Valley will itself act as a major selling point in attracting further investment and jobs in renewable energy, which is now one of the fastest-growing business sectors."

The plant will serve markets in the UK and Europe, producing fuel that can be mixed with ultra-low sulphur diesel for use in standard and commercial vehicles.