Calls have been made for a “discontinuation fund” to support communities in the north of Anglesey following a decision to suspend plans for a new nuclear plant in the area.

Councillors in Amlwch have described the delay or potential scrapping of the multi-billion-pound Wylfa Newydd development as a “human tragedy”, after many hoped it would bring an economic revival to the area.

The plant was set to be built less than six miles from the town and to create 850 permanent jobs in the area, which was decimated economically following the end of energy production at the former Magnox reactor in 2015 and the closure of Amlwch’s Octel bromine works in 2005.

It had been estimated that the new power station could be worth more than £20m a year in wages alone to the local economy throughout its 60-year life.

But the announcement that the “pause button” was being pressed due to difficulties in securing funding has raised concern over the future of any such project in the area.

About 400 people currently work for Hitachi subsidiary Horizon Nuclear Power at Wylfa and Oldbury in Gloucestershire, but the vast majority will lose their jobs.

The number of workers at the former Magnox reactor is also expected to dwindle over the coming years as de-fuelling continues, leading to the loss of more well-paid jobs.

Reacting to Thursday’s announcement, local county councillor Aled Morris Jones said at Tuesday’s town council meeting: “This is an oversight on the part of the government. The policy should have already been sorted out to fund this.

“My understanding is that the UK Government was unwilling to take the hit if there was a problem with the build, but in fairness the strike price on offer was very good.

“They are talking now of a minimum delay of at least two years, but this is a human tragedy for us in north Anglesey.

“I’m aware of a couple who had bought their first house because of the wages on offer by Horizon, but now this has happened the wages on offer locally is only half of that.”

He added: “In my view, Hitachi has a moral obligation to help these people. Whether they will or not is a different matter.

“Its about time we went to UK Government and see if they can buy that site to move things forward. We have got to go to London and knock on doors.

“We also have to ask Hitachi for a discontinuation fund to support the area, because a two-year gap is not acceptable.

“This is an endemic failure in the economic policy.”

Cllr Gareth Winston Roberts added: “This is really bad news for Anglesey and north Wales.

“We had our first meeting regarding Wylfa Newydd as far back as 2006, but the sad thing is that so many people will lose their jobs in March.

“I hope there will be some positive news over the next two to three weeks in regards to the Development Consent Order.

“If that process continues then it’s a positive development at least.

“But there’s no hiding it – this is sad news which also affects other proposed developments on the island, including Land and Lakes.

“There are hotels in Amlwch that were doing well because of all the contractors staying in them, so this announcement affects everyone in the area.”

The decision, however, has been welcomed by some anti-nuclear groups  who claim that warnings over the project’s costs had been ignored.

“It is time for politicians and officials from the UK government, the Welsh Government and Anglesey to admit that they were wrong,” said a spokesman for People Against Wylfa B (PAWB) in a statement.

“Wales is rich in natural resources which can be used to create a vibrant and sustainable energy future, and above all else create more jobs in less time than Wylfa would have done.”

In response, a Horizon spokesman said: “We fully recognise the potential impacts of Hitachi’s announcement last week to suspend the Wylfa Newydd project.

“This is to allow further time for discussions to continue with all parties to try and ensure that there is a positive future for the project, and the economic benefits that it will bring to Anglesey and the wider North Wales region will be realised.

“It’s important to note that Wylfa Newydd has been suspended, not cancelled, and the continuing discussions will also include working closely with local stakeholders to minimise any impacts.

“Already we have made a firm commitment to make sure all our apprentices will complete their apprenticeships, and we will be doing our utmost to assist our employees into future employment as we bring our current range of activities to a close.”