A GWENT man could end up being king of his own castle - after his plans to redevelop it were knocked back.

It comes complete with dungeon, towers, moat and a huge great hall, and owner Peter Morgan said it was love at first sight when he paid 1.7 million for Pencoed Castle, Newport.

The property developer from Usk said: "The minute I saw it I decided to buy it. This looks like a proper castle. There aren't many around and not many come onto the market."

Much of the building dates from the 1500s, when Sir Thomas Morgan moved onto the site, but parts have been added and restored over the centuries.

In recent times the castle, near Llanmartin, has had a colourful history.

It was last used to farm chickens, and other developers suggested turning it into a hotel with two golf courses in 1990.

In 1999 the council turned down plans for the Legend Court theme park - a concept that promised film studios and 17,600 jobs, but clashed with protesters' environmental concerns.

Mr Morgan, 42, bought it in 2003 and has tried to get planning permission to turn the castle into offices and build 12 executive homes to help pay for the restoration.

But last week the council turned him down, citing fears over the financial viability of the project, access to the site and that extra homes would be built in the future.

"As a last resort I would keep the whole castle for residential use and move in myself with my family. It would cost about 2m to restore," he said yesterday.

Now Mr Morgan, who spent 100,000 and two years making the application, is trying to think of another use for the grand old castle, including making it into a country house hotel.

He said: "The most sympathetic way to restore it is for commercial use. That way we can keep it all in one piece.

"I've done something similar with old barns at Llancayo Court, in Usk, and it has been very successful."

Mr Morgan recovered about 900,000 when he sold off 300 acres of existing farmland for agricultural use.

He hopes to find a use for the remaining 70-acre castle site before the Ryder Cup golf tournament arrives in 2010.

Mr Morgan said the castle, which if converted would hold at least 12 bedrooms, is "still a sound investment" but admits that restoring it could become a "bottomless pit".

He added: "It's starting to decay and needs work. It's a building at risk. It needs saving and it would be a shame to see it fall into ruin.

"The way to get the money back would be to make it into apartments, but there's no way I will separate it."