A FORMER scrap metal dealer believes the industry will soon collapse amid diving prices.

Len Stokes wound up his one-man business last December as he struggled to make a profit.

Now he believes there is no future in scrap metal dealing because many merchants are turning away old cars.

Mr Stokes said he used to receive around £35 per tonne of scrap just two years ago.

But this had plummeted to £7 per tonne by the time he wound up the business, based near his home in Alfrick, near Worcester.

He was forced to put up his price of around £30 to remove vehicles to £50 because of mounting diesel prices and poor returns on the scrap.

But many owners refuse to pay the prices, while yards frequently turn old vehicles away.

"I found I was paying my rent and my bills but at the end of the week, what had I been working for? I had nothing in my pocket," said the 42-year-old, who now runs a successful landscape gardening business.

"Twenty years ago when I first began, it was really good. Even up to two years ago, things were good.

"But it just was not paying enough and I think it will get worse if anything."

Mr Stokes' fears follow new research which suggests up to half of Britain's 26m older cars are virtually worthless.

A survey by used car guide CAP Black Book has found that a four-year-old Lada Samara with 70,000 miles was worth just £160, while a 1990 Jaguar 2.9 with 140,000 miles was worth just £630.

Researchers found that more than half Britain's 26,268,802 cars in 1998 were more than seven years old, but many were in good condition.

The decreasing cost of old cars has also been blamed for the increasing number of abandoned cars found around the county.

In Worcester city alone, 458 vehicles were dumped last year, compared to 238 the year before.

"We see it as a nationwide trend," said principal environmental health officer Anita Fletcher.

"If you look at the value of older cars these days, the bottom has fallen out of the market, plus there are increased motoring costs."