Hugh Godwin: Scarlets sinking in red sea

Spectacular win a haunting reminder of the financial calamity facing Llanelli

The Llanelli Scarlets wing Mark Jones's breathtaking try - a high-quality cocktail of smart footwork and searing pace - had the glitterati of Wales's former glory waxing lyrical at London Irish on Friday night.

Gerald Davies, a sometime newspaper writer, swayed from side to side in his press seat to mimic Jones's movement. Phil Bennett, the flint-like ex-Llanelli fly-half, burbled happily into his BBC radio microphone.

But on the subject of the Scarlets' suggested demise through financial problems, both men were silent. "Don't quote me, I'm on the Welsh Rugby Union," said Davies, while Bennett, the chief leisure officer for Carmarthenshire County Council, confided it is literally more than his job is worth to give an opinion. It is a political minefield in the old tin-plate and coal town.

Huw Evans, the chairman of Llanelli RFC, who own the Scarlets region, had been more forthcoming before the 32-25 win which got his side off to a five-point flyer in the Heineken Cup. "We've got to get a break in the next month or it's the doomsday scenario," he said.

The "break" he is looking for is a loan of £2 million to ease the strain on a trust of his to which the Scarlets owe £7m of a reported £9m debt. They went cap in hand to the Welsh Rugby Union earlier this month but were knocked back. A local businessman offered to help but was shooed away.

Llanelli have a plan to quit their spiritual home at Stradey Park and build houses on it, releasing an estimated £23m, which would both clear their debt and contribute £10m to a new 13,500-seater stadium built by the county council. The spanner in the works they say they did not see coming was the Welsh Assembly calling the Stradey plans in for inspection last summer on environmental grounds.

"We wanted to be in the new stadium in August 2007," Evans said. "Now it will be August 2008 at the earliest." And Llanelli, according to their chairman, cannot afford to wait.

No one, whether it is politically correct to say it or not, wants to see the Scarlets die. The Llanelli name is known around the world, synonymous with rugby's finer arts and a soulful devotion to them. Steve Lewis, the chief executive of the WRU, says four is the "rock bottom" number of regions. But the Union, with £40m debts of their own, are in a cleft stick.

Their name is already mud in the Mid Glamorgan Valleys for allowing the original fifth region, the Celtic Warriors, to go under in the summer of 2004. Evans's trust has a first charge on Stradey Park - where the All Blacks famously fell in 1972 on "the day the pubs ran dry" - which it will share with, but not hand over to, any new lender.

Local residents protest that the Stradey area is susceptible to flooding and the plan for 450 new homes is ruinously overblown. Oh, and there happens to be a Welsh Assembly election next May; Labour's maj-ority over Plaid Cymru in the Llanelli seat in 2003 was 21 votes.

"Our own government preach about regeneration but they are doing us down," said Evans, who played his rugby for Swansea and lives in Cheltenham, but stepped in "to save a bastion of the game" when Llanelli first hit financial trouble in 1997.

Within two years of the game going open the club needed a £1.25m sale of Stradey Park to the WRU, and donations of £600,000 from 1,000 members, to stay afloat. "No team, no club, no nothing," was the spectre raised then by the chief executive, Stuart Gallacher, until Evans's money - made in computer software - shored them up. But the message was the same again at the start of this season. A fresh meeting with the county council is rumoured, though Evans, who is working "50 hours a week" to sort the club out, said there is no hope on the near horizon.

The Scarlets represent the whole of mid and north Wales, and everything west of the Neath-Swansea Ospreys region. They are the focal point of their town but have no facilities at Stradey other than a faded function room. Corporate hospitality? Forget it. The catering comes in from a nearby hotel. A request to host an Indian wedding with 5,000 guests had to be turned away. Every home match is a missed opportunity to earn money.

Evans said the WRU did well out of the Stradey deal, making a minimum £750,000 profit from Llanelli's annual rent and the £1.54m paid by the trust to buy the ground back. He describes the trust's £7m as "a no-brainer in investment terms" in that it offers the prospect of £45m revenue at the new stadium, compared with £15m at the "decaying dump" that is Stradey.

Using the same rationale, Evans's board decided two years ago not to slash annual squad costs of £2.7m - "we would have lost all our internationals" - and they bought back the Wales fly-half and captain-elect Stephen Jones from France last summer.

"Speculate to accumulate is what comes to mind," said Phil Davies, the director of rugby, after the London Irish win. "As you've seen, we've got a quality group of players that are doing Llanelli Scarlets and Wales proud. We will carry on doing what we did tonight until somebody tells us any different."

Davies has asked Bennett to hand out the scarlet jerseys before next Friday's pool match against Ulster. The club's history continues to both tug at the heart-strings and tilt the balance sheet.

Timeline: Decline & fall of Llanelli legend

1997: Rugby goes open, Llanelli RFC quickly run up debt. Stradey Park mortgaged to Welsh Rugby Union for £1.25 million; bought back last year for £1.54m.

2003: Formation of Llanelli Scarlets region, owned by Llanelli RFC.

2004 April: Llanelli RFC and Carmarthenshire County Council announce intention for Scarlets to move to a new stadium; Stradey to be sold to private developer to help pay for deal.

May: Scarlets win Celtic League.

July: Proposed stadium revealed as 13,500 all-seater at £45m retail park on wasteland at Pemberton.

2006 January: Llanelli submit plans for 450 homes at Stradey. Morrisons supermarket chain and Stadium Retail Investments Ltd pay reputed £10m and £26m to county council for Pemberton retail sites.

May: Objectors to Stradey housing plan present 1,300-name petition to Welsh Assembly. Residents claim susceptibility to flooding means only 81 homes are feasible.

June: Environment Agency declare opposition to Stradey plans.

July: County council planners approve Stradey development. But Welsh Assembly calls it in.

September: Scarlets warn that without extra financial assistance it is "extremely unlikely" they will survive to end of season.

4 October: With Scarlets reportedly £9m in debt, chairman Huw Evans asks WRU for £2m bridging loan.

7 October: Clive Hughes, local property developer, offers Scarlets loan of £2m repayable within 12 months. Offer rejected.

12 October: WRU turn down Scarlets loan "on legal and financial grounds".

2007 January-May: Possible time-frame for Welsh Assembly planning inspectorate to examine Stradey development.

Hugh Godwin