A ROW has blown up over plans for a motor racing circuit in Ebbw Vale, with claims from top racetrack Silverstone it could be being funded by illegal state aid.

Silverstone Circuits Limited has written to the Prime Minister asking for clarification of financial support for the Ebbw Vale Circuit of Wales project.

There have been reports that public money could be put into the circuit, possibly via the Welsh Assembly.

However, a statement from Silverstone said its bid for financial support to secure the future of Formula 1's British Grand Prix was denied on the basis that this would be classed as illegal state aid.

"Silverstone has been advised that an injection of funds by the Welsh and/or UK governments to the Circuit of Wales project could also amount to illegal state aid, as a transfer of state resources would give Circuit of Wales an economic and selective advantage over other circuits (and developments)," said the statement.

"There are currently a number of well-established, privately-funded circuits in the UK, including Wales, that feel that the British motor sport industry would be threatened by the addition of a government-funded circuit.

"Silverstone has no objection to competition between UK circuits, but it has to be a level playing field.

"Silverstone reiterates that it is sympathetic to the economic situation in Ebbw Vale, but motor sport at circuit level is not particularly profitable and is often loss making. Many UK circuits are under-utilised and struggle for revenue. It is unrealistic to suggest Circuit of Wales will be the exception."

A spokesman for the Circuit of Wales said that it was "important to note" that the Circuit of Wales is located in one of the poorest areas of the country and as such it qualifies for support in encouraging economic activity. Any application for support, once made, will be fully appraised in line with existing policy and procedure.

Michael Carrick CEO of the Heads of the Valleys Development Company, commented: “We are disappointed to have heard of the content of this letter, it sounds like Silverstone is resistant to investment within the automotive sector which is vital to its continued growth and development in the UK. The suggestion of 'illegal state aid' made by Silverstone also highlights they do not understand the basic process of applying for state funding of this nature.”

A Welsh Government spokesperson said: “Apart from an initial grant to fund the early stages of project development there has been no request or offer for any funding support for this project.”

Blaenau Gwent MP Nick Smith added it wouldn’t be fair if assistance for the Circuit of Wales was stymied by the self interest of Silverstone.

He said: “The objection from Silverstone for possible state funding for the Circuit of Wales feels a bit like the pot calling the kettle black”, he said.

“In recent years Silverstone has received much UK Government and Local Government financial support for their development.”

“The last government provided £8m to speed up construction of the A43 bypass to help ease congestion near the Silverstone circuit.

“Northamptonshire County Council loaned the motor racing group £13m in 2010 to help it update the facility including track and pit lane, and are currently providing a £1.5m investment to help rollout the Silverstone Masterplan (including Park and Ride).

“Meanwhile, a Government-funded programme announced in 2011 allowed Silverstone to house a University Technical College to train hundreds for a career in motorsport.

“Any further funding for the Circuit of Wales from the UK or Welsh Governments should be treated on its own merits and receive due diligence by the minister responsible for funding.

“What wouldn’t be fair would be if assistance for the Circuit of Wales were stymied by the self interest of a competitor such as Silverstone.”

A spokesman for No.10 Downing Street confirmed that they had received the letter, but did not give a response to it on Thursday afternoon.