THOUSANDS of jobs in Gwent are in the balance with the proposed Circuit of Wales motor racing track just 48 hours from collapse, the Argus can reveal.

A dispute between developers, financers and Welsh Government civil servants over whether the investment of taxpayers’ money amounts to state aid could scupper the scheme – which developers say will bring 6,000 jobs to Blaenau Gwent.

If a deal is not agreed by tomorrow then the project looks dead in the water.

We understand the dispute centres around legal advice being given to Assembly minister Edwina Hart that a proposed £32m Welsh Government investment amounts to state aid, which is illegal under European Union law for such a project.

Lawyers for the Circuit of Wales and main investors Aviva deny this is the case, but without Ms Hart’s sign-off the project is likely to collapse.

It is understood the Welsh Government has already committed £17m in the scheme, with a further £14m to follow. Some £2m of public money has already been spent on the planning stage of the scheme, including a lengthy public inquiry.

A source close to the Circuit of Wales project told the Argus: ““We are adamant the proposed investment from the Welsh Government does not amount to state aid but that is not the advice being given to the minister.

“This is not just a racetrack - this is a regeneration project in an area that desperately needs it.

“The project is going to use 650 to 700 tonnes of British steel and local labour. It would create 400 local jobs in the first six weeks of construction and 1,600 across 24 months.

“Over the first ten years of the circuit’s operations, we expect to create 6,000 jobs – many of them for automotive industries that will be enabled by the development."

The source said investment for the proposed circuit, which would stage the British MotoGP from 2018, was secured with Aviva ready to provide £350m.

However, if Welsh Government agreement for the scheme is not signed off by Thursday, when the Assembly is dissolved ahead of next month’s elections, then it is likely Aviva will withdraw its support.

The news comes after builders have already started doing groundworks at the site, at Rassau Industrial Estate.

Alun Davies, AM for Blaenau Gwent, said: "There are currently some very detailed and delicate negotiations ongoing between Welsh Government and the Circuit of Wales development.

"It's neither helpful nor productive to speculate further at this time."