ODOUR-eating bugs may have saved a pioneering but 'smelly' North Herefordshire company from closure.

The Environment Agency is poised to grant a waste management licence for the controversial Bioganix waste-into-fertiliser pilot plant which processes Sun Valley chicken feathers and other waste.

The licensing decision follows the installation of a bio-filter. Bacteria in a mix of woodchips and seashells are 'eating' the odours which have been troubling residents near the site at Wharton Court, Leominster.

The Environment Agency, which has faced repeated complaints over smells and demands for the plant to be shut down, now looks set to issue a licence in May if the company overcomes a planning hurdle.

Herefordshire Council must resolve outstanding planning issues at the site, by the A49, where tonnes of waste are composted in a massive reactor as part of an experimental process.

"Our perception is that things are improving with regard to odour," said Andrew Osbaldiston a technical expert with the Environment Agency.

"The bio-filter seems to be performing. The number of complaints from residents has gone down and we are no longer getting complaints at weekends.

"We see no reason not to grant a waste management licence."

He said the licence would come with a string of conditions and the agency, as a last resort, had the power to revoke or suspend it and prevent waste materials entering the site if conditions were breached.

However, the agency cannot issue a licence until Herefordshire Council grants retrospective planning permission for the bio-filter and associated works.