A former industrial heartland, Merthyr has a population of 55,000

The cultural enterprise centre in Merthyr Tydfil will aim to help small creative businesses and individual artists in the south Wales valleys.

Culture Minister Alun Pugh said he had set aside the funds for next year, despite the draft budget defeat in the assembly by opposition parties.

A feasibility study will take place to establish the needs of the region.

Broadcaster Mario Basini, author of a forthcoming book on Merthyr, said the town had produced an "endless string" of musicians, poets and novelists - but did not even have a cinema.

If you simply hang a few pictures on the wall and wait for people to come in, they won't, quite frankly Broadcaster Mario Basini

"We've got a town of 55,000 people but if you want to go to the pictures you've got to go down the valley," he said.

But Mr Basini said there was no point in having an cultural centre if people did not visit it.

"You really do need an arts centre in Merthyr, not just for Merthyr but for the rest of the valleys. But what we must do is get people in there immediately," he said.

"If you simply hang a few pictures on the wall and wait for people to come in, they won't, quite frankly."

Alan Pugh said a culture centre for Merthyr and the heads of the valleys area is long overdue.

The Galeri in Caenarfon is seen as a model which Merthyr could copy

"Merthyr has a rich cultural heritage and its people want to participate and experience the arts," he added.

The new facility will combine a theatre and arts centre and will involve the Arts Council of Wales (ACW) working with the Heads of the Valleys Partnership, Merthyr Tydfil Council and the University of Glamorgan.

ACW chairman Professor Dai Smith and Mr Pugh visited the town on Wednesday to meet a group aspiring to be theatre promoters.

Similar arts centres have been completed in both Caernarfon and Newport.

Mr Pugh also announced �250,000 available to support the development of English-language theatre in Wales.

This is in addition to the �500,000 announced at ACW's conference in November 2005.

Proposals developed by ACW for English-language theatre in Wales will be discussed in the assembly's culture committee on Thursday.