UP TO 465 jobs could be created in the Gwent Valleys if a communications firm wins a £1.7 billion Ministry of Defence contract.

And a further 200 jobs could be transferred into Gwent from Bristol if Canadian-owned CDC Systems clinches the lucrative deal and moves its operations to Oakdale. The MoD has three firms in the frame to replace its battlefield radio system with a new digital communications system - including CDC Systems.

CDC Systems says it is looking at Oakdale Business Park in the Caerphilly county borough area as a site for the 400 new jobs with 150 of them in place by the end of the year.

CDC Systems says it expects to hear if it has been successful in its bid by the middle of July.

In addition to its headquarters the company has plans to build a £25m centre of excellence for army communications technology research and development. It would be staffed by 65 scientists to work with universities.

It would be a major coup for the business park which aims to attract 5,000 jobs to the area hit by manufacturing job losses in firms like Solectron, Bairdwear and Corus. CDC Systems, which has its UK headquarters in Bristol, says it will shift that and its 200 workers across the River Severn to Gwent, if it wins the MoD Contract.

CDC Systems is competing with Thales, of France and US-owned TRW, to win the lucrative communications contract.

CDC Systems UK Limited managing director Larry Johnson said: "We have been in very detailed discussions with the Welsh Development Agency, local members of parliament and Assembly members over a period of some months. They have all been extremely helpful and encouraging."

CDC Systems says it expects to hear if it has been successful in its bid by the middle of July.

Don Touhig, the Islwyn Labour candidate, said: "I have been involved in discussions with CDC since before last Christmas.

"I have brought them down a couple of times to Oakdale Business Park and they have liked what they have seen.

"Firstly it would be a real hi-tech facility, secondly this £25m centre of excellence, linked with universities, would be very welcome as would a bolt-on associated factory which would bring additional jobs in the manufacture of the communication kit which would be located nearby."

Mr Touhig said a facility exists at Oakdale Business Park which CDC has seen and which the firm could move into straightaway.

"This would be a showpiece inward investor and it confirms what I have been saying that we do have a world class workforce, excellent facilities and communications and an ideal place to grow a business. But it is a fingers crossed situation as the decision on the contract has not yet made."