ENVIRONMENTAL initiatives by the Government are helping fuel the rapid resurgence of an Oxfordshire company which was on its knees little more than a year ago.o The Harwell-based environment division of AEA Technology, which employs 600 staff, is being held up as a key to the future of the firm.

AEA has the Government contract to run Envirowise, an advice service to companies and householders.

Earlier this year, the unit renewed the contract, worth £5.7m a year over five years.

It is estimated that its advice on energy-saving measures and ways to combat waste amid rising energy bills and the water shortage has helped British industry save £1.3bn a year since it began in 1994.

Along with other new contracts, this helped to slash AEA's pre-tax losses by £11m, to £3.1m in the year to March 31.

Turnover rose 12.1 per cent, to £55.7m.

That contrasts with the fortunes of the company in May last year, when its shares crashed, followed by the resignation of chairman Peter Watson. It sold its remaining peripheral businesses for £40m and underwent a radical financial restructuring.

Chief executive Andrew McCree, who was appointed last year, has identified water-saving measures as a key area where AEA's consultancy expertise will be valuable.

He said: "A lot of new initiatives will be coming from Government to encourage industry to be more efficient in its consumption of water. These initiatives will come from us.

"I believe There's a long-term increasing demand for more advice from Government to do with the supply and consumption of energy.

"The business we have in Oxfordshire is very well placed to be at the heart of that."

AEA is opening an office in Romania, which will be an extension of the environment arm and help to generate business in Eastern Europe.

Mr McCree added: "We have made very good progress, but there's still a lot to do. The environment side offers us a very exciting opportunity and is an important priority."