GWENT could miss out on vital Euro funding - because most companies don't understand how to apply for it.

The Argus reported yesterday that millions of pounds of Objective One aid for the South Wales Valleys may have to be handed back to the EU.

Money from the £1.4 billion of structural funds given to Wales is being spent too slowly and the Assembly's audit committee said it may be withdrawn by the European Commission.

The report states: "We remain very concerned at the prospect of this risk (of decommitment) materialising since that would mean a real loss of hard cash for Wales."

It also warns the risk of "decommitment" could jeopardise a further £52 million reserve dependent on performance.

But one business chief says EU structural funds are not allocated quickly because the application procedure is too long and complicated for most private companies.

Jon Hughes, deputy chief executive of Newport & Gwent Enterprise, a not-for-profit company set up to provide business advice, said: "The application form is 25 pages long and comes with three books of guidelines each about one inch thick.

"Reams of supporting documents are required such as three years' audited accounts, company registration details, a statement of equal opportunities policy and so on."

Survive this procedure and you will still have a long wait for approval.

Mr Hughes said: "One application I've made on behalf of my own organisation has been back and forth to the Assembly's European Funding Office since May.

"But if you start a project before receiving grant approval you automatically disqualify yourself on the basis that you can manage without EU support."

Mr Hughes actually questions the relevance of EU structural funding to the private sector because it seeks to enrich the community rather than than private individuals.

He said: "The big winners have been local authorities and public sector organisations because they can easily justify an application's community merits.

"They also have plenty of administration staff to wade through the paperwork."

Blaenau Gwent economic development director Peter Slater said: "EU funding applications require major consultation because we're trying to achieve long-term sustainable development.

"We can't simply slap in a bid for several million pounds and say 'give us the money'."

He claimed to have enjoyed a good working relationship with the European Funding Office.

"It's all very well to criticise them for slowing down the application process, but it's public money they're trying to protect.

"Can you imagine the Press reaction if projects are approved which have no hope of success and end in complete shambles?"

But Glenys Kinnock, Labour MEP for South Wales East, does not believe Wales will lose out.

She said: "Expenditure targets for this year have been met with weeks to spare."

Mrs Kinnock did admit that funding had suffered from "structural problems on a day-to-day basis".

She said: "I am aware that there have been difficulties but those are now being addressed although we do need to organised a quicker way of dealing with applications."