An Ilkley company has been given the green light to develop a process which could be worth billions.

The Government has given biochemical company Bio Natura the go-ahead to develop a groundbreaking process which converts cardboard into compost.

The move could lead to the creation of 50 jobs and reduce landfills sites across the globe.

The firm has won a DTI-funded Smart award to develop the environmentally-friendly treatment which breaks down paper and cardboard and turns it into a peat-like material for use in gardening.

The global market for the product is potentially worth billions of pounds and could lead to a vast reduction in landfill in the UK and abroad.

Keith MacGregor, Bio Natura's managing director, said: "This project is a departure from our core business but has enormous potential.

"We have estimated the market for the treatment could be worth billions.

"Up until now we have relied on third parties to manufacture, sell and market our products, but with this we intend to set up a manufacturing plant in Yorkshire and hope to create up to 50 jobs within the first year.

"Landfill is a serious concern, both in Britain and abroad, and our treatment could drastically reduce it while at the same time creating a useful product out of waste material.

"In a sense, by returning cardboard and paper to the soil, we would be returning them to their natural states as they are both produced from trees."

At present, paper and cardboard accounts for nearly half of all UK landfill.

The two products cannot be burnt because they have low calorific values and, though both are biodegradable, they take hundreds of years to decompose naturally.

Bio Natura's treatment is designed to speed the decomposition of the cardboard to create a regenerative product from waste matter.

The company, which currently has seven staff, was founded in Ramsgill, near Pateley Bridge, in 1995 by Keith MacGregor, a former environmental consultant. It relocated to Ilkley late last year.

It has developed a wide range of environmentally-friendly treatments for horticulture and agriculture.

Business Link York and North Yorkshire innovation and technology adviser Roger Benson helped the firm win funding.

He said: "I am delighted to have helped Bio Natura gain backing for their very exciting product."