Ravenscraig closed ten years ago

Blaenau Gwent AM Peter Law said the credibility of the whole body was at stake.

"This is the test for the whole assembly .....because if we don't change things we will have failed," Mr Law told AMs.

Professor Paul Blyton from Cardiff Business School said the importance of establishing a rail link from Ebbw Vale, where the steelworks were set up in an economic and communications blackspot, could not be underestimated.

"It's very important for the whole valley as there is not much regeneration in the area so the 'employability' of people will not be in that locality."

At Ravenscraig in Scotland, where the last major steel closure occured a decade ago, it took some time before political in-fighting ended and a strategy emerged to tackle the nearly 5,000 job losses.

Now the area around that plant - which was once described as "the rust bucket of Scotland" - has become a major success story with around 15,000 new jobs created.

A European Freight terminal has been opened there, a business park opened and enterprise zone status granted. Unemployment rates, once 3 % above the average, have come down.

In Wales, a restored passenger rail link between the worst hit town Ebbw Vale - where 400 jobs have already been shed - and Cardiff is one of the key measures being backed.

Other measures include a new development company for Newport and money for and money for training and IT schemes.

Widespread support

Other steel communities around Wales - Shotton in Flintshire and Bryngwyn in south west Wales - are also to get aid.

There has been widespread support for the measures announced and the speed with which the regeneration plan has been put into place.

Professor Blyton said the Welsh Assembly had been most "put out" that it did not have more influence before the Corus job cuts were announced last year - and was now trying to redress the balance.

He said Newport had a buoyancy of its own which would help create jobs, in a dynanism which was not present in Ebbw Vale.

Efforts have been happening since the retraction of the steel industry across the UK to regenerate communities.

One of the bodies in the task force set up to address the regeneration issue is UK Steel Enterprise which was established in 1975 to stimulate the economy in former steel areas.

The Corus subsidiary makes strategic investments in companies with growth potential and is active in economic regeneration.

The assembly has reacted quickly

"The key lesson we have learned from the Ravenscraig experience is that you need to work in partnership with others to maximise results," said UKSE's Regional Manager in Wales David Hughes.

"Each party will bring it's strengths to the partnership.

"For example last year we invested �1.3 million into Welsh companies which will assist those companies to grow and create jobs.

"In Gwent, working with other agencies, we have provided �160,000 in funds for loan and grant schemes to aid micro businesses, and in Gorseinon we have supported the Local Regeneration Forum with cash grants for community projects."