A scheme which could create up to 2,000 jobs in one of the worst unemployment blackspots in the UK has been referred to the Welsh Assembly Government for a decision.

The �275m proposed development in Merthyr Tydfil was approved by councillors on Thursday night.

Councillors rejected a recommendation made by planners

The plans include a new retail park, an all-seater football stadium, and a business park at a 550-acre site in Rhydycar.

But the Merthyr Village scheme - which involves moving 200,000 tonnes of coal from the area - has faced opposition from local people who fear that opencast mining will take place.

However, a spokesman for Merthyr Village Limited said there are no plans for opencast extraction during the reclamation of the land.

At a meeting on Thursday, planning officials at Merthyr council recommended rejecting phase one of the plan - which involves recovering the coal and preparing the site.

Their advice was given because much of the scheme would be built on woodland and sites of archaeological interest.

But councillors voted to overturn that recommendation and approve the proposals.

The assembly will now rule whether the final decision on the scheme will be made by them or Merthyr council.

The plan has now been referred to the Welsh Assembly, though the council is mindful to approve it Norman Davies, Merthyr council

Norman Davies, head of planning at the council, said the majority of the proposed site was outside the "settlement boundary" of the town.

"Even though it has been industrial land, it is classed as countryside - the site has been regenerated with woodland and fauna.

"It is a historic landscape with archaeological features.

"We recommended rejecting the plan to protect the countryside.

"The plan has now been referred to the Welsh Assembly, though the council is mindful to approve it," he said.

"It has not got planning consent but has overcome a significant hurdle.

"It has been sent to the assembly with a list of planning conditions.

"They will decide if they want to be the determining authority or whether they return it to the council for consent," he added.

The council are expected to know the assembly's decision in January or February.