IT WAS vaunted as a crucial step in Blaenavon's regeneration, the transformation from a mining town to literary beacon.

But three years after the launch of Blaenavon as a booktown to rival Hay on Wye, almost half of the book shops are closed, and the razzmatazz of its festival scaled down.

Even so, one of the owners believes the town is facing a new chapter. It may be a rollercoaster ride for the book dealers but there is a positive upside to their - and the town's - prospects.

Andrew Nummelin, owner of Browning Books in Broad Street added: "The booktown is not going downhill, but it's not going up smoothly either - it's bit of a rollercoaster.

"But it's definitely up compared to the state of it three years ago, when it was known as 'Plywood City' because so many shops were boarded up. "There will be one new bookshop coming in the next two months, and a teashop selling books and antiques as well, plus the Spring Festival (March 31 - April 2) is going to be quite some event so it's going in the right direction."

Three years ago seven bookshops opened for business. Three have closed and James Hanna, the American entrepreneur who masterminded the project, has left the area.

Torfaen council tourist chiefs have admitted that the sort of festival held in previous years which attracted well-known authors and a host of literary events will not now happen.

"There is some sort of a thing going on but it is not on the scale it has been in the past," a Torfaen council official said.

New-Orleans-born Mr Hanna - who claimed to have sold his first book to a friend when he was only six - was the driving force behind the booktown project. Tens of thousands of books were stored in a Blaenavon warehouse for distribution to would-be booksellers keen to set up their own businesses.

The aim of Blaenavon Booktown was to emulate the success of Hay which has the biggest second-hand book sales in the world with cafs, restaurants and quality shops to serve browsers.

For a while the Blaenavon project, which was supported by Richard Booth, the self-styled 'King of Hay', seemed to thrive. Not only book shops but cafs opened to cater for the expected rush of visitors. Mr Hanna, who owned one of the shops which has closed, is launching a booktown project in the North of England.

Joanna Chambers, owner of Broadleaf Books, which opened in Broad Street in 2003, said: "People who came here with dreams of making a living in a year have gone, and the people who are left are the ones with more realistic views. It's levelled out and I think the town can move on from here."