The 35-mile canal supports more than 1,000 jobs and contributes around £30 million annually to the Welsh economy. Earlier this year, unusually dry conditions and new restrictions on water extraction from the River Usk left the canal at risk of running dry, prompting urgent intervention by Glandŵr Cymru – the Canal & River Trust in Wales.

Under the new agreement, the Welsh Government will provide £400,000 a year, supplemented by up to £100,000 from the Canal & River Trust, with talks ongoing to secure further contributions from other partners. The funding replaces a temporary arrangement, which had been due to expire in March 2026, and is intended to ensure long-term resilience for the historic waterway.

Welsh Liberal Democrat leader Jane Dodds said the package was “a huge relief for the communities and businesses that depend on the canal.”

She said: “We have been fighting for certainty and long term security for this waterway because it is not just part of our heritage, it is the backbone of the local economy.

“I am delighted that funding has now been secured to protect jobs, support tourism and keep this iconic canal fl owing for future generations.”

Ms Dodds continued: “Earlier this year more than £5 million was spent on urgent works at the Manorafon pumping station to keep the canal supplied until 2026, but long term funding had remained uncertain until today. The new five-year agreement provides the stability needed to plan properly for future resilience, helping to ensure the canal remains a global attraction and an economic lifeline for mid Wales."