The Environment Agency has extended the operating licence for the controversial Cardiff Bay Barrage until 31 March.

The Agency said it was satisfied with the management of the £200m project by the Cardiff Bay Development Corporation following the introduction of new procedures.

At the beginning of December, the Agency ordered the Corporation to open the sluice gates following concerns over possible flood risks.

An embarrassing row erupted over the management of the high-profile scheme and questions were later asked in the National Assembly.

On 10 December the CBDC met a deadline for settling concerns over the operation of the computerised sluices and a temporary licence was granted.

That authorisation was due to expire at midnight on 14 January.

Further testing

The new licence will run out at the end of March, on the day the Corporation is due to be wound up.

Roy Fowles, the Environment Agency's Regional Manager, has promised that further checks will be carried out.

"In the period to the end of March further testing of the Barrage will progress with the aim of subsequently reverting to automatic operation of the sluice gates," said Mr Fowles.

"On satisfactory demonstration of the operation of the Barrage the Agency will allow permanent impoundment of the Bay," he added.

The Agency said it was satisfied with the progress made by the Corporation.

'Pull the plug' warning

At the beginning of December, the CBDC was warned that unless it solved the technical problems, the Agency could order the draining of the man-made 500-acre lake.

Talks later settled the issue, after the Corporation gave a number of undertakings.

They included an immediate drop in water levels to four metres and the manual operation of sluices at all times.

Staff also manned the controls 24-hours a day to ensure there was enough storage capacity for flood water.

The Corporation has said the barrage actually helped prevent flooding in the area over Christmas.

CBDC said river flood warnings combined with a maximum tide level in the estuary of 7.6ms would in the past have led to flooding.

But Charles Bush, duty manager of the barrage, says the barrage controlled levels so that the water level in the Bay only rose to 5.6ms - two metres lower than the high tide.