Merthyr councillors have lost their fight to continue with a major land reclamation and opencast mining scheme at Dowlais.

The scheme would have been one of the largest schemes ever undertaken in Europe.

But the National Assembly has refused the council permission to compulsorily purchase the land.

The consortium CLH Ltd had resisted the council's bid for a compulsory purchase of the site.

The company had wanted to mine land it already leased at Dowlais Top.

And CLH had offered Merthyr Tydfil Borough Council up to �5m if given the go-ahead.

However, the local authority wanted to buy the land itself and let the company Celtic Energy - owners of the mining rights - extract coal from part of the site.

Public inquiry

The site had been at the centre of controversy since the council made a joint application with Celtic Energy to carry out the opencast mining and reclamation scheme at the Ffos y Fran site.

A public inquiry was held after developers CLH offered the council �1 per tonne of coal extracted - up to �5m - if it was allowed to do the work.

But the council refused the offer and tried to compulsorily purchase the land so that Celtic Energy could carry out the scheme.

The leader of a campaign fighting opencast developments in the town said

the district auditor should now be called in to investigate.

The council said that it was still considering a 154-page document from the assembly.