Llanidloes has been badly hit by job losses

Developers say the holiday let project, which would be based in picturesque woodland, would transform a 30-acre stretch of sheep grazing land just outside the town into an eco-friendly development of 60 detached log cabins.

It is claimed the Pen y Banc Woods project would bring 15 new jobs , along with a boost to the local economy.

The project has the backing of civic leaders, who have seen huge job losses in Llanidloes with the closure of the Laura Ashley factory and redundancies at car components company KTH.

The proposed site sits on farmland, in a natural saddle on the top of a high ridge, so the new development would have no impact on existing views enjoyed by locals.

The town is economically deprived, and it needs a shot in the arm Edward Hamer

The man behind the scheme is Llanidloes farmer and businessman Edward Hamer, who owns the land on which the development would be based.

The former abattoir owner said he hoped it would bring "new prosperity" and open up the Upper Severn Valley to sustainable, all-year-round tourism.

"After BSE, foot-and-mouth, and the more recent closure of the KTH. plant with the loss of 252 jobs, Llanidloes and the surrounding area needs a little good news," Mr Hamer said.

The location of the development, between the Hafren Forest and Llyn Clywedog, has been chosen to attract the affluent city dweller in search of rural peace and tranquillity.

Part of the site includes a former lake, drained in 1955, which the developers plan to restore and surround with new woodland.

The Welsh Development Agency has paid for a feasibility study into the project, though the scheme itself will be solely funded by Mr Hamer's company.

Log cabins have a wistful appeal for holiday-makers

"The whole thing is a farm diversification to help Llanidloes," he said.

"We have walkers and visitors to Llanidloes, but they need to stay longer. At the moment, they come for a few hours' walking and then off they go. They're not actually spending their money in the rural economy, and that's what we need.

"The town is economically deprived, and it needs a shot in the arm."

Recent years have seen much public funding spent on popular walks in the area, and Mr Hamer hopes his scheme will help make the most of these investments.

Dallas Davies, chair of the local chamber of trade, said there were high hopes that more tourists would help to boost the town's ailing economy.

Town mayor Edward Breeze said the area had all the potential needed. "We get people from London who keep coming back every year because they love the place," he said.

"They honestly think they have come to paradise when they come here."