Tesco Confirms China Merger Talks

Tesco has confirmed it is in exclusive talks over combining its Chinese operations with a major supermarket operator in the country.

While it is unclear at this stage whether a deal would mean the Tesco brand disappearing in China, Britain's biggest retailer updated investors on the talks after they were made public by Sky's City Editor, Mark Kleinman.

Its statement said: "Noting recent media speculation, Tesco Plc and China Resources Enterprise Limited (CRE) today announce that they have entered into a memorandum of understanding and are in exclusive talks to combine their Chinese retail operations to form the leading multi-format retailer in China."

Tesco said the proposed joint venture would create a business with sales of some £10bn, in which CRE and Tesco's effective interests are expected to be split 80% and 20% respectively.

The proposed deal - which would represent a significant watering down of Tesco's China operation - would involve CRE combining its CR Vanguard business, which operates 2,986 stores across China and Hong Kong, with Tesco China's 131 stores and shopping centre business.

"The intended partnership follows a series of highly successful joint ventures between CRE and other multinational corporations and is consistent with Tesco's stated strategy of focusing on profitable routes to growth in fast-growing but less mature markets," Tesco said in the statement.

"The transaction is subject to further due diligence and agreement of final terms. There is no certainty that a transaction will occur," it added.

According to Chinese media the company has failed to turn a profit in nine years in China.

Tesco recently closed its operations in Japan and in the US and it moved to improve its core UK supermarket business.

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RBS Gets Heated Over £230m Radiator Deal

By Mark Kleinman, City Editor

The taxpayer-backed Royal Bank of Scotland (RBS) is risking a renewed political outcry by opposing the restructuring of a major British-based manufacturer that would preserve hundreds of UK jobs.

Sky News has learnt that RBS intends to vote against a proposed takeover of Ideal Stelrad, which makes boilers and radiators, by Bregal Capital, a private equity firm, in a move which will potentially prevent a transition to new ownership.

Bregal has tabled an offer valuing Ideal Stelrad's equity and debt at roughly £230m, a sum sufficient to enable the company's senior lenders to recover their original exposure to it.

RBS, which holds approximately 15% of Ideal Stelrad's shares, is understood to be holding out for a better offer despite the fact that the group's lenders have run an auction lasting well over six months.

Bank of Ireland, another major financial institution that was bailed out by taxpayers during the banking crisis of 2008, is also said to be opposing the deal, although it speaks for only around 5% of the company's shares.

The takeover bid from Bregal is understood to require the approval of at least 75% of Ideal Stelrad's shareholders, but with time running out ahead of an initial deadline on Friday evening, support for the deal is understood to have stalled at around the 70% mark.

Although it is possible for Ideal Stelrad's board to extend the deadline, many of the manufacturer's lenders are understood to be frustrated at RBS's stance and are concerned that Bregal could withdraw its interest.

A spokeswoman for RBS declined to comment, although a source close to the bank said that several options for the future of Ideal Stelrad remained under consideration. RBS did not have the power on its own to block a deal and the bank was intent upon remaining as an investor even after a transaction, they said.

RBS has frequently encountered a political backlash over its lending activities since it was rescued by taxpayers in 2008, with complaints ranging from its choice of customers to its perceived willingness to lend to British companies seeking funds to expand.

Headquartered in Newcastle, Ideal Stelrad has manufacturing facilities in Hull and Mexborough, south Yorkshire. It employs roughly 1,800 people in the UK and at its international operations in countries including Holland, Romania and Turkey, and Bregal is understood to have indicated that it would maintain the manufacturing capacity in the UK.

Ideal Stelrad is one of hundreds of companies in which RBS ended up holding a significant equity stake after the banking crisis and subsequent recession, with these shareholdings apportioned to dedicated teams within the taxpayer-backed bank.

Insiders said that relations between Ideal Stelrad's chairman, Richard Connell, and RBS had been strained for some time.

The bank is said to have been keen for the radiator and boiler divisions of the company to be sold separately in an effort to maximise value. Insiders said on Friday, however, that profits had been in decline at the radiator unit while trade buyers had not made compelling bids for the boiler business.

Bregal is a private equity firm whose investors include the billionaire Brenninkmeijer family, founders of the high street retailer C&A. Its investments in the UK include the fast-growing education company Cognita, and Zephyr, a wind-power generator.

The prospective buyer is understood to have structured its offer to allow existing shareholders to remain owners of up to 24.9% of the company if they wish to remain exposed to it.

If Bregal does succeed in acquiring Ideal Stelrad, it would become the third private equity firm to own the manufacturer in less than a decade.

Previously called Caradon Plumbing, the company was acquired by Montagu, formerly HSBC's buyout division, for £496m in 2000. The new owners decided to break up the business, selling Twyford Bathrooms for £85m and Mira Showers for £301m, and selling the rump of the group to Warburg Pincus for £227m in 2005.

That investment went awry after Warburg Pincus refinanced Ideal Stelrad at the height of the debt boom in 2007. The company then breached its borrowing agreements and underwent a financial restructuring that culminated in a debt-for-equity swap.

The current auction is being run by BNP Paribas, another of Ideal Stelrad's shareholders. Among the other investors are understood to be HSBC, GSO, a division of the giant US investment firm Blackstone, and National Australia Bank.

BNP and Bregal, which is being advised on its bid by DC Advisory Partners, were both unavailable for comment.

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Tesco In Vanguard Of China Merger

By Mark Kleinman, City Editor

Tesco is on the verge of an agreement to merge its operations in China with the country's biggest retailer as it takes another step towards reshaping its international business.

Sky News has learnt that Tesco is expected to announce on Friday that it has signed a memorandum of understanding to combine its store estate in the world's most populous country with that of Vanguard, a subsidiary of China Resources Enterprise (CRE).

The deal, if completed, is also expected to involve Tesco paying several hundred million pounds to CRE as the British company's chief executive, Philip Clarke, grapples with the challenges of maintaining a viable business in China.

People close to the situation said Tesco was likely to emerge from the negotiations with CRE with a 20% stake in the enlarged business but cautioned that finalising an agreement was likely to take several months.

The new joint venture would have more than 3000 shops and would be easily the largest retailer in seven of the eight mainland Chinese provinces with the highest GDP rankings in the country.

Tesco's decision to abandon its go-it-alone approach in China may suggest that it is continuing its  international retrenchment after a decade of expansion which saw it become the world's second-biggest retailer behind Wal-Mart.

In 2011, Tesco announced plans for an aggressive expansion of its business in China, which currently has about 130 stores.

Analysts said the CRE joint venture would enable Tesco to reduce the amount of capital it committed to its business in China while accessing the greater local expertise of its new partner.

"It's a sensible-sounding deal because it will allow them to focus more on the core UK market," said one.

The City has been braced for a deal in China since a Financial Times report in May which said that Tesco was exploring a joint venture.

Mr Clarke is understood to have travelled to Asia in recent weeks to thrash out the agreement with CRE and Vanguard executives.

The Chinese joint venture will enable Mr Clarke and his executive colleagues to intensify their efforts to re-energise the British business which fuelled Tesco's rapid growth under his predecessor, Sir Terry Leahy.

Since taking over last year, Mr Clarke has had to contend with the fallout from the horsemeat scandal but has begun to win over shareholders with new ideas to reinvigorate its most important market.

Earlier on Thursday, Tesco unveiled a new concept store in Watford containing areas designed to appeal to diners and young mothers, part of Mr Clarke's campaign to re-engage consumers with the Tesco brand.

The chain's boss still has other international challenges to overcome, even if the CRE deal does get signed.

People close to the situation said Tesco was likely to decide in the coming weeks what to do about the future of its loss-making Fresh & Easy chain in the US, with a closure as well as a sale still on the table as potential options.

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Revealed: The UK's Most Wanted Tax Fugitives

By Poppy Trowbridge, Business and Economics Correspondent

A rogues' gallery of the UK's most wanted tax fugitives has been released in a bid to collect hundreds of millions of pounds in unpaid duty.

One year on from releasing the details of the UK's 20 most sought after tax criminals, HM Revenue & Customs (HMRC) has now added the names and photographs of 10 more fugitives to that original target list.

Those on the list are being pursued for a range of crimes including VAT fraud, tax evasion and money laundering.

Together, their crimes have cost the taxpayer close to £720m.

Among the new names on the list are Michael "Arthur" Fearon, who is wanted in connection with evasion of excise duty on nearly £8.4m cigarettes, and is believed to be in the Republic of Ireland.

Chancellor George Osborne says tax evasion 'will not be tolerated'

Anish Anand, who is believed to be in the UK, is wanted in relation to £6m VAT and film tax credit fraud, while Michael George Voudouri is wanted in connection with £10m VAT fraud. He is believed to be in Northern Cyrpus.

And Sumir Soni (aka John Soni, John Miller, Samir Soni, Bhader Singh), who is believed to be in Kenya, is wanted in connection with evading duty of £3.6m from the illegal sale and distribution of alcohol, and the illegal importation of nine million cigarettes.

Anthony Judge, who was wanted for his role in over £350,000 of tax fraud and had been on the run for 10 years, was detained at Heathrow Airport last month as he attempted to enter the UK on a forged passport.

He is the second of HMRC's most wanted to be captured since the rogues' gallery was first published.

In May, John Nugent was apprehended in the US after the authorities there saw the list.

The gallery has been viewed over 1.5 million times, with new intelligence received from the public on the current whereabouts of 17 of the 20 named on the original list.

HMRC has also launched an interactive map of the world to illustrate where the tax fugitives are believed to be.

The crimes of those on the list have cost the taxpayer £720m

Chancellor George Osborne said: "Our message is clear, tax fraud and evasion is illegal and will not be tolerated.

"The Government has stepped up HMRC's enforcement activities to enable them to pursue tax cheats relentlessly around the world."

"This new list will help put more tax fraudsters in the spotlight and bring them to justice."

The Chancellor has faced public outrage in recent months over the number of large, multinational corporations operating in Britain that pay little or no corporation tax on earnings which can top billions of pounds each year.

Yet some tax experts say HMRC is missing the real problem in tackling tax avoidance.

Richard Murphy, of Tax Research UK, told Sky News: "The problem is very large companies who aren't paying very large amounts of tax that they might owe because of skilful tax avoidance by accountants and lawyers.

"The second problem is actually ordinary people avoiding and evading income tax by putting cash in their pockets … paying their builders, their plumbers, their cleaners, their tutors and everybody else without tax being paid and that is a massive problem in our economy.

"But the big problem is not this form of crime of which this list is being published about."

Taxpayers Alliance chief executive Matthew Sinclair said part of the difficulty was with the UK's "hugely complex and fundamentally dysfunctional tax system".

He said reforming taxes to make them simpler would reduce the scope for evasion and free up HMRC resources to focus on fraud.

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Borrowers Boost: Interest Rates Tied To Jobs

The Bank of England plans to keep the base rate of interest at its record low level until unemployment falls to 7% - unlikely for another three years.

The announcement was made by new governor, Mark Carney, at his first Inflation Report news conference where he outlined sweeping changes to monetary policy in a bid to provide more clarity to the public and financial markets.

The bank said it would keep the base rate at 0.5% unless inflation threatened to spiral out of control or there was a danger to financial stability.

Policymakers said they stood ready to buy more government bonds if additional stimulus was needed and would not reverse existing purchases while unemployment was too high.

It meant there would be no scaling back on the bank's £375bn programme of quantitative easing (QE) for at least three years.

The bank expects economic recovery to accelerate

Mr Carney said unemployment falling to 7% would mean more than 750,000 UK jobs are created, which, combined with rising wages, would represent "real improvements in the lives of people across the nation".

But the Bank suggested that growth was likely to be "weak by historical standards", even though economic recovery was "taking hold."

Inflation, the report said, was forecast to stay above its 2% target until the second half of 2015 based on market rate expectations though it was now not expected to rise above 3% this year.

The forward guidance on the likely movement of bank rate - while welcome news for borrowers - means savers face more years of weak interest on their money.

A growing number of major central banks, including the US Federal Reserve, are providing so-called forward guidance to help nurse their economies back to health.

The BoE also forecast that the economy would grow by 0.6% during the current quarter - the same as between April and June, and that growth would reach an annual rate of 2.6% in two years' time.

The Chancellor welcomed the introduction of forward guidance by the Bank in a letter to Mr Carney.

George Osborne said: "Given the exceptional economic challenges continuing to face the UK economy, I agree with you that forward guidance can play a useful role in enhancing the effectiveness of monetary policy and thereby supporting the recovery."

Vicky Redwood, chief UK economist at consultancy Capital Economics, said the Bank's guidance was a "clear steer that interest rates will stay on hold until the end of 2016 or even 2017.

"Although financial markets already expected rates to stay low for a long time, this probably exceeds their expectations," she added.

But the Bank's interest rate pledge did little to boost market confidence as the FTSE 100 Index fell as much as 1% after the announcement, although the pound gained some strength.

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'One In Four' Mums Feel Work Discrimination

More than one in four mothers feel they have been discriminated against at work while pregnant or after returning to their job, according to new research.

Two thirds also said they would advise women to wait until the last possible moment to tell their bosses they are expecting.

But the survey of almost 2000 women found that most did not make a formal complaint about the discrimination.

The study, by law firm Slater & Gordon, questioned mothers on how they were treated before and after the birth of their child and showed some employers were still penalising women for getting pregnant.

Almost a third said they were not treated well during their pregnancy and maternity leave, while almost half were overlooked for a promotion, almost a fifth demoted, while more than a third had responsibility taken off them.

Two out of five also said younger colleagues without children were given more support and encouragement.

Kiran Daurka from Slater & Gordon said: "Despite the equality legislation in place, attitudes and working practices continue to block women in achieving their career aspirations in the UK.

"Anecdotally, we hear of mothers complaining about being put on a 'mummy track' when back at work, and this research illustrates that this is a real experience for many women."

It is illegal to sack a women because she is pregnant or on maternity leave, said Employment Minister Jo Swinson.

She said the Government was committed to supporting women's talents and that shared parental leave and pay, being introduced in 2015, "will allow couples to choose how they share care for their child in the first year after birth".

However, TUC general secretary Frances O'Grady said newly-introduced fees for employment tribunals would deter some women from tackling discrimination.

"Sadly some employers are still living in the dark ages when it comes to women in the workplace," said Ms O'Grady.

"[But] by introducing tribunal fees of up to £1,200 to take an employer to court over pregnancy discrimination, the Government has ensured that many more of these women will have to suffer in silence."

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Fair Trade Warning To Quick Home Sale Sector

The trading watchdog is urging almost 120 firms operating across the "quick house sale" sector to make sure their business practices are up to scratch.

The warning comes after an investigation found some hard-pressed customers end up handing over their home for less than half of its market value.

The Office of Fair Trading (OFT) said it has also opened formal investigations into three un-named businesses for alleged unfair practices that may have led to some customers losing tens of thousands of pounds.

People who sell their homes to a quick house sale firm usually receive between 10% and 25% less than the market value of their property in return for getting fast access to cash.

But concerns have been raised about firms reducing the price offered at the last minute when the seller has already committed to the transaction.

The OFT said it has seen firms dropping the prices they will pay by up to 53% on initial offers which were already below market price, leaving people tens of thousands of pounds out of pocket compared with the market value.

The average quick sale is estimated at around £100,000.

The regulator warned that some firms risk giving the industry a bad name by exploiting a customer's difficult financial circumstances and giving them significantly less than they were expecting.

It said seven in 10 complaints received by the OFT about quick house sales came from "vulnerable" consumers who may have been particularly attracted by claims of a hassle-free service, with no viewings or hold-ups.

These include older people who may be suffering ill health, people who are heading for repossession and need a fast route out of their debt problems and those who are under pressure to stop a property chain collapsing.

Gaucho Rasmussen, OFT Director, said: "Responsible quick house sale firms offer a valuable service to consumers who want a fast sale.

"However, we have also seen potentially illegal behaviour and as a result the OFT has opened investigations into three companies.

"When sellers get a bad deal, they could lose a lot of money. We want to ensure that consumers can have confidence in this sector and put an end to these shoddy practices."

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Bank Of England To Unveil Monetary Policy Shift

By Ed Conway, Economics Editor

The Bank of England is set to unveil the most significant changes to the way it conducts monetary policy since it was granted independence in 1997.

Mark Carney, the bank's new governor, is expected to announce that in future it will follow a policy of "forward guidance" - pre-committing to keeping interest rates low long into the future.

The precise details of the new policy will be laid out at the bank's Inflation Report press conference at 10:30am, but economists say the bank may pledge to leave rates unchanged until the unemployment rate drops beneath a certain threshold.

Allan Monks of JP Morgan said he expected that level to be 7%, but added that the main message will be "that rates are unlikely to rise for the next two years or more - despite the better signs on growth".

The BoE is expected to follow "forward guidance"

The economy has been showing increasingly convincing signs of recovery in recent weeks, with both the services and manufacturing sectors expanding at rapid rates.

The data has led some to suggest that any shift by the Bank of England may risk stimulating the economy too much.

However, Sir John Gieve, former deputy governor, said forward guidance would help improve the bank's communication with the general public.

"The main impact will come through how it affects the economy," he said.

"But Mark Carney is also very keen to reach out beyond the narrow audience of central bank watchers, to ordinary people and companies. I think he can do that if he can keep the message simple and plain."

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Weather Helps Economic Recovery 'Build Steam'

There is further evidence the UK's economic recovery is gathering pace following the release of a closely-watched survey for the dominant service sector.

It grew at its fastest pace in more than six years in July, according to the Markit/CIPS Purchasing Manager's Index (PMI), boosted by new orders and better weather.

The PMI has now shown growth for seven consecutive months and the latest service sector rise follows strong gains in equivalent manufacturing and construction surveys.

Taken together, the data gives the highest composite PMI since the series started in 1998, suggesting economic output from July to September is well-placed to beat the 0.6% GDP growth recorded for the previous three months.

Paul Smith, senior economist at Markit, said: "Although an early call on one month's data, the forward-looking elements from the survey point to a further strengthening of GDP in Q3 as the UK heads towards 'escape velocity' and self-sustaining economic expansion."

Construction and manufacturing are also seeing signs of better growth

Both new orders and business confidence in the services sector rose in July, with the new orders coming in at their fastest pace since November 2006.

While firms said that some of July's strength was due to unusually warm weather, overall the figures point to a very rapid turnaround for Britain's economy, which just a few months ago looked vulnerable to facing a third recession in five years.

Although Britain's economy is still 3% smaller than before the financial crisis, signs of expansion also pose a challenge for the Bank of England.

On Wednesday, new governor Mark Carney is due to say whether the bank will go ahead with a policy of 'forward guidance' aimed at keeping down bond yields while the economy remains fragile.

Some policymakers may be reluctant to make a lengthy commitment to low rates at a time when the economy may be on the cusp of a more rapid recovery.

Separate reports on Monday from the CBI business lobby group, manufacturers' organisation EEF and recruitment group Reed pointed to improvements in the economy, although "significant risks" remained.

The CBI said new orders among small to medium-sized manufacturers continued to fall in the three months to July, "disappointing" expectations for growth.

Its head of economic analysis, Anna Leach, said: "Despite another disappointing quarter for small and medium-sized manufacturers, with output continuing to fall, optimism about the general business situation has risen for the first time since spring last year.

"Firms expect demand to improve both at home and abroad and production to stabilise over the next three months but manufacturers remain concerned about the impact of political and economic conditions overseas on external demand, reflecting on-going uncertainty about the global economic outlook."

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Amazon's Jeff Bezos Buys Washington Post

The founder of Amazon has personally bought The Washington Post and other newspapers for $250m (£163m).

Longtime publisher, The Washington Post Co, announced the deal with Jeff Bezos on Monday.

Mr Bezos is buying the paper as an individual, and Amazon.com Inc is not involved in the sale.

Donald Graham, Washington Post chairman and CEO, called Mr Bezos a "uniquely good new owner".

He said the decision to sell was made after years of newspaper industry challenges.

The company, which owns the Kaplan education business and several TV stations, will change its name.

Mr Bezos said in a statement that he understands the Post's "critical role" in Washington and said its values will not change.

"The paper's duty will remain to its readers and not to the private interests of its owners," he said.

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Little Chef Bought By Kuwaiti Group 'For £15m'

The Little Chef chain of roadside restaurants has been sold to a Kuwaiti restaurant group.

The company went up for sale in April, six years after it was rescued from administration.

During that time there were several attempts to revive its position in the market as one of the main providers of snack foods for people on the move around Britain.

Celebrity chef Heston Blumenthal was among those recruited to inject new life into its traditional menu of mainly fried breakfasts and burgers.

But the chain had been struggling for some time to compete with the other fast food chains and supermarkets that were increasingly occupying motorway service stations.

Now Kuwait restaurant owner Kout Food Group Restaurants UK Limited (KFGR-UK) has bought the company for what is believed to be £15m.

It was rumoured to be on the market for 'tens of millions of pounds'.

KFGR-UK takes over a group, famous for its 'Fat Charlie' logo, that has been slimmed down from more than 400 at its peak to 83 sites beside A-roads all over Britain, all of which are believed to be profitable.

Heston Blumenthal was brought in to revive the fortunes of Little Chef

The seller, venture capital group RCapital, said it was confident that KFGR-UK  would continue to rejuvenate Little Chef's fortunes.

RCapital CEO Jamie Constable said: "Since we put Little Chef up for sale people have asked us, why sell the business?

"The answer is very simple. We are specialists in reversing the fortunes of businesses with significant financial and operational problems.

"We turn businesses around, we rebuild and fix them, that's our business.

"When we bought the chain, it needed huge changes to revive the business and bring it back to profitability.

"Having owned Little Chef for a long time it feels like we are selling part of ourselves.

"But we take comfort from the fact that the new owners will take the brand to the next stage."

KFGR-UK said it had ambitious plans for the company.

Chairperson Fadwa al Homaizi, said: "KFGR-UK has exciting plans to revitalise the Little Chef brand.

"Little Chef will benefit from a process of brand renewal in keeping with current trends, supported by traditional British values."

Kout Food Group runs several branches of Burger King, Pizza Hut and Taco Bell in its home country. 

It also operates a portfolio of Middle Eastern brands such as Ayyame, Kabab-ji, Burj Al Hamam and the ice cream parlour Scoop A Cone.

Little Chef employs 1,100 staff and has sites across Britain's A-roads.

After trialling Blumenthal's meals in 2009, his new menus were rolled out to several branches. It is not known if his menus will continue to be served.

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Zero-Hours Contracts 'For One Million Britons'

By Liz Lane, Sky News Reporter

Research suggests many more people may be on zero-hours contracts than was previously thought.

The agreements mean that employees are expected to be on call, but are not guaranteed any work from one week to the next.

The Chartered Institute of Personnel and Development (CIPD) estimates there could be one million UK workers on such contracts.

This contrasts with Office for National Statistics figures which suggest only 250,000 were on such contracts at the end of last year.

CIPD surveyed 1,000 employers and found one in five use zero-hours contracts for at least one member of staff.

Business Secretary Vince Cable has ordered a review into the practice

Firms in the voluntary and public sectors, as well as the hotel, leisure and catering industries, are more likely to use them.

CIPD chief executive Peter Cheese said: "Zero-hours contracts are a hot topic and our research suggests they are being used more commonly than the ONS figures would imply.

"However, the assumption that all zero-hours contracts are bad and the suggestion from some quarters that they should be banned should be questioned."

The Unite union says the government must stop the growth of the zero-hours culture, as these contracts are "the latest attack on workers' rights and dignity".

Business Secretary Vince Cable has announced his staff are going to investigate how they are being used.

"Whilst it's important our workforce remains flexible, it is equally important that it is treated fairly," Mr Cable said.

"This is why I have asked my officials to undertake some work over the summer to better understand how this type of contract is working in practice today."

Separate research among zero-hours contract workers revealed only 14% said their employer failed to give them enough hours to have a basic standard of living.

Sarah Wicks, from Liverpool, used to work as a security guard on a zero hours contract, but sometimes worked 72 hours a week.

But she said that the large number of hours did not equate to job security.

"There wasn't much expectation that your job was ever going to get any better, or that you had any recourse to the employer for anything," Ms Wicks said.

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Ireland Digs Deep For Economic Recovery

By David Blevins, Ireland Correspondent, in County Mayo

Seismic surveys are to be carried out to ascertain if Ireland has enough oil and gas reserves to export fuel.

Shell is already building the longest gas tunnel in Europe (4.9km) to transport fuel from one field, 85km off the west coast.

If Russia ever turns off the supply, Ireland may soon be able to offer an alternative.

Michael Crothers, managing director of Shell Ireland, explained: "Because Ireland is beside a major market, and the UK is looking at decommissioning nuclear facilities, having to shut down coal-fired power plants because of greenhouse gas emissions, there's an enormous opportunity for Ireland, if gas can be found, to export into that ready market."

At the peak of its 20-year life, gas from the Corrib field will meet two thirds of Ireland's need. 

The ambitious project has created 1,400 construction jobs in County Mayo, a remote region previously blighted by unemployment and emigration.

Bernadette McManamon, a civil engineer, said: "Sixty percent of my class, if not more, have emigrated and most of them are in Malaysia or Australia and some in America so I definitely wouldn't be working in Ireland … if it wasn't for the Corrib gas project."

The exploration has not been without its opponents. In 2005, five local protesters - the so-called 'Rossport Five' - went to prison.

Civil engineers will carry out the seismic surveys

Lessons have been learned about the need for greater engagement with communities along the coastline before any prospecting takes place.

Gerry Coyle, a Fine Gael councillor, said: "You cannot come in and go telling them what to do. You have to explain in great detail.

"Sometimes, it's very difficult on communities. This community were cast into the middle of this. They didn't go looking for gas. Gas came to them."

Mr Crothers agreed: "I really think it depends upon how they are approached. Any project is a balance between the social, the environmental and the economic and getting that balance right is key."

The gas has brought an estimated 6bn euros (£5bn) for Ireland's GDP.

Tommy Talbot, who opened a local hotel during the recession, said: "You drive from here to Dublin and there's a lot of towns on the way out - Roscommon, Leitrim, there's nothing in them. They really are struggling.

"Down here, we really have been cushioned by the development."

To date, they have found one trillion cubic feet of gas in the Corrib field, boosting the country's energy security.

If the seismic surveys turn up enough fuel for export, Ireland could have found the solution to its economic problems.

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Swansea Bay Tidal Lagoon May Open In 2017

By Rhiannon Mills, Sky News Correspondent

Exploratory work is underway off the coast of south Wales where scientists hope to build the world's first tidal lagoon power station.

As Britain continues to search for more sustainable forms of energy, plans are in place for a 9.5km-long, U-shaped sea wall in Swansea Bay that would harness the strength of the tides.

The £650m project's 26 hydro turbines would be permanently under water, generating energy on both the incoming and outgoing tides.

It is hoped the power station could produce enough electricity to power every home in Swansea, saving over 200,000 tonnes of CO2 and offering predictable zero-carbon electricity for 120 years.

The project is yet to receive planning permission but teams are already drilling to assess the make-up of the seabed.

Alex Herbert, head of planning for Tidal Lagoon Swansea Bay, told Sky News: "We hope this will be the first in a network of lagoons around the British coast which could produce up to 10% of our energy requirements.

The power station's 26 turbines would be permanently underwater

"With the first one happening in Wales, we're on the map and we're producing jobs locally, as well as expertise we can take elsewhere."

Promotional videos describe the power station's potential to help regenerate the area and attract tourists.

The sea wall would be used for walking, running and cycling, while the lagoon itself would be used for watersports.

However some groups have concerns about the environmental and visual impact of the project.

"It's concerning a number of people," Swansea councillor Tony Colburn said. "It's basically going to cut the bay in half and we'll be looking at a very large wall as opposed to the magnificent view we've got."

Sarah Kessell, of the Wildlife Trust, added: "There could be a loss of breeding ground or of spawning areas for fish that birds feed on.

The 9.5km-long sea wall would be used by walkers and cyclists

"We don't know what the long-term impact will be ... but there are certainly opportunities for mitigation along the way."

A planning application will be submitted later this year with a decision expected in early 2015.

If the development is approved it could be open by 2017, with similar schemes possible in Colwyn Bay, north Wales, and in locations near Liverpool.

Canada, France and South Korea already have tidal power plants but the one planned for Swansea would be the first to utilise both the incoming and outgoing tides.

The bay is considered an ideal location for the project because of its shallow water and 10-metre tidal range - the second highest in the world.

"It's a fantastic proposal because it diversifies how we produce energy," Barry Stewart, a local wildlife enthusiast, said.

"Obviously a project of this scale is always going to have an adverse effect on some ecological features. The wildlife can be accommodated but time will tell."

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