CHEMICALS company Huntsman is on the verge of bidding for millions of pounds of grant aid to help build a specialist plant.

The firm's aspirations to build a polyethylene plant would take a giant leap closer to fruition if it can secure important Regional Selective Assistance (RSA) funding.

The Northern Echo revealed in April that the US-owned company had embarked on a feasibility study with a view to building the plant on the Wilton International site, near Redcar.

The bulk of the £600,000 review has been completed and the decision to apply for Government assistance indicates there is potential for the project.

The move would create up to 80 direct jobs and hundreds of construction posts.

It would also safeguard 400 employees who work on Huntsman's distinctive Cracker works.

The polyethylene works would cost more than £100m to build and would utilise ethylene created during the production at the Cracker.

RSA aid provides for up to 20 per cent of capital projects.

Bill Perfitt, Huntsman spokesman, said: "The main feasibility stage is now vitually complete.

"The signs are encouraging that this is an attractive project with plenty of potential benefits, particularly underpinning the future of the Huntsman Cracker at Wilton.

"That has encouraged us to pull together a grant application under the Government's Regional Selective Assistance scheme.

"That application is nearing completion and we are looking to submit that in the next few weeks."

He added: "That is potentially the key factor in whether we have a project or not."

Huntsman produces two million tonnes of bulk commodity chemicals ethylene, propylene and butadiene each year.

It had planned to supply ethylene to a polyethylene producer on Teesside.

But the continuing depressed world markets have stopped a potential suitor setting up on the site.

However, the company has not ruled out finding a third party partner to work on the project.

If it can secure RSA money, it would have the option of pressing ahead with the proposal on its own.

Alternatively, grant aid could provide the hook needed to encourage another polyethylene producer to work with Huntsman to establish the plant.