THE company behind the controversial biomass plant for Southampton insists plans are still in the pipeline despite deepening financial problems.

Shares in Helius – which wants to build a £300m woodfuelled station in Millbrook – have continued to plummet despite the company enforcing a raft of redundancies and £1m of cost-cutting measures.

But the company is banking on a change in fortunes after announcing a new investor is emerging to back another biomass plant in Bristol it was struggling to fund.

It comes after opponents of the Southampton plant raised fresh pollution fears proposed 100megawatt (MW) woodfuelled station in the Western Docks following a massive woodchip blaze at the city’s docks.

As reported in the Daily Echo an unnamed investor pulled out of a deal at the last minute for another 100MW station in Avonmouth in October causing the firm’s share prices to tumble from 8p to 3.50p in a matter of weeks.

The price has plummeted to 1.3p at one point last week – less than a sixth of their value three months ago.

Southampton protesters say the continuing uncertainty casts further doubt over the proposals for the plant just yards from homes in Freemantle and Regents Park.

The company has yet to submit a formal application for the site which it claims will be capable of producing enough energy to power 200,000 homes and save the equivalent of 470,000 tonnes of CO2 annually.

But in a statement, Helius said: “The company continues to endeavour to secure funding for its Avonmouth project and is in early discussions with a new potential funder. No material third party cost commitments will be made to the project unless and until there is a clear pathway to funding.”

The statement continued that the company – which will report on progress in March – has clawed back £1m by making redundancies and moving its head offices from London to Grimsby.

Daily Echo: How the proposed biomass plant will look from Foundry Lane

Foundry Lane in Shirley, where the plant will be visible to residents

Executive chairman John Seed said “good progress”

has been made in cost-cutting and added: “The company is therefore carefully evaluating its options to ensure that it maximises shareholder value.”

But Millbrook ward Tory councillor Steve Galton, said: “If they can’t make the Avonmouth project stack up financially there is no hope they are going to justify the Southampton one.

“We can all only hope that it is sooner rather than later that the Helius threat is finally removed.”

Freemantle ward Labour councillor Dave Shields said: ““I’m not putting any money on the biomass plant happening anytime soon. It’s unlikely.

“I think there seems to be a lot of speculation going on around the future of the plans for the expansion of the port and I think we should have all of our cards on the table and have a discussion about what kind of development needs to take place.”