Kentucky-based firm Four Rivers BioEnergy said it has bought the currently dormant 140-acre site in Blyth from V-Fuels Biodiesel.

Although the Blyth plant currently stands dormant, the new owners say it could become commercially operational within months.

Gary Hudson, president and CEO of Four Rivers, said: "We are delighted to have reached this agreement.

"In particular we have acquired a complete, currently dormant, but previously operational biodiesel plant, that is differentiated in terms of technology, location and logistics and which we believe will shortly be fully and commercially operational and offers plenty of scope for expansion.

"We were also attracted by the ability to expand the existing business, use the excellent logistics of the site and local infrastructure and apply proven technology from other industries."

The plant's machinery allows for the use of a variety of feedstocks, including used cooking oil, to produce clean-burning biodiesel.

Currently, the fully-licensed plant is capable of producing about 120,000 tonnes of biodiesel – one of the largest plants in Europe.

But the company says it has the capacity to expand to produce one million tonnes a year, which would make it the largest biodiesel plant in the world.

The previous owners had plans to build their own terminal at Blyth Port to ship its biodiesel around the world.

Dan Cross, managing director of V-Fuels Biodiesel, said "These are very exciting times for everyone concerned with the Blyth manufacturing facility and I am very much looking forward to working with likeminded people at Four Rivers.

"The acquisition of the plant by Four Rivers brings together two groups of people with a desire to successfully develop the green energy market across the USA and Europe and with the expertise and vision to successfully develop other green business opportunities."