The UK Government has denied that construction has been halted on the multi-million pound Hyundai semi-conductor plant in Scotland as fresh fears surfaced over the project's future.

A Hyundai executive reportedly told a press conference in Seoul earlier this week that construction work had stopped, and that Hyundai was now considering the possibility of a joint venture there with another firm.

The factory is projected to cost $3bn

But company sources have played down his reported remarks, which were made in Korean, suggesting that translation difficulties had led to a misunderstanding.

Construction of the factory at Dumfermline, Fife, which is projected to cost £3bn, is set to be completed in May. The first phase of the project will employ 800 people.

But the economic turmoil which has engulfed the Tiger economies of south-east Asia has delayed the plant coming into operation.

In December, Hyundai stated that construction work would continue, but after the plant had been completed there would be a delay of up to a year before it was equipped and commissioned.

Company sources said that remained the case, despite the confusion which had stemmed from the Seoul press conference and a subsequent TV interview given by a Korean-speaking Hyundai executive.

A statement by the Scottish Office did not rule out the possibility of alternative strategies which would lead to the plant becoming operational.

A spokesman for the Scottish Office said: "Anything which would help ease the financial difficulties facing Hyundai and which would help to minimise the delay in equipping and commissioning the new plant would obviously be welcomed.

"In the meantime, construction of the new facility at Dunfermline continues, and we are continuing to offer the firm every assistance in carrying forward implementation of the project."

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