A major telecommunications company is believed to be on the verge of signing a deal which will bring 800 jobs to an unemployment blackspot in south Wales.

The firm One 2 One - part of the giant German company Deutsche Telekom - has been holding talks with the Welsh Development Agency and Merthyr Tydfil Council about setting up a call centre in the town.

According to BBC Wales' sources, the deal has formally been clinched and will be announced in the New Year.

It is believed the deal has been negotiated for several months.

The company had been considering three sites for the call centre.

The WDA ays they are negotiating with a major company which could bring a significant project to the town, but say there has been no final decision.

Leader of Merthyr Council Ray Thomas said the authority had been marketing the site widely.

He confirmed a planning application has been lodged with the council and exploratory drilling has taken place.

Mr Thomas said the site was earmarked by the WDA for a call centre some time ago as it has excellent road access and is very near the town centre.

He said the site will offer first-class employment opportunities - not just at the centre - but the shops and services in the town will benefit from the influx of people working at the centre.