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A deputy mayor has re-formed a chamber of trade in a Powys town plagued by long-running traffic problems and the economic downturn.

It has been set up in Newtown by retired market trader Phil Watkins, who says the situation is "bleak".

Drivers have long faced tailbacks, but there are complaints problems have grown since traffic lights replaced a roundabout near a Tesco.

A bypass is planned for the town, but it could be 2014 before it is built.

The original chamber of trade was disbanded several years ago when the economy was buoyant. It is thought businesses lost interest in the group.

Mr Watkins said he wanted companies to start talking and forming strategies to boost trade.

So far 24 businesses have joined the chamber and late-night shopping has started on Thursdays in the run-up to Christmas.

The recession, two out-of-town supermarkets and competition from larger towns over the Welsh border in Shropshire, have all had an impact on the high street in Newtown.

"It's pretty bleak in the town centre. People are saying there's nothing there," said Mr Watkins.

"Then there's the traffic problems. They are stopping people coming in. If you live within a 10-mile radius it can sometimes take one hour to get into Newtown.

"People are avoiding the town."

Mr Watkins said high business rates and rents were also to blame for the town centre's troubles.

"There are quite a few empty shops and businesses are coming to the end of their leases and deciding to call it a day," he added.

Town butcher Peter Jacks said the chamber's late-night shopping initiative had not brought a lot of extra custom into Newtown.

"I'm a member of the chamber and I think in time it will have an impact. It's early days at the moment," he added.

Ian Williams, owner of the Elephant and Castle Hotel and the chamber's new chairman, said the group already had 24 members and had 36 people at its last meeting.

"The traffic queues are putting people off coming into the town centre, so we're missing out on passing trade. A bypass is vital," he said.

"If you ask local people, they want the town centre to succeed. But people have to use it, they have to shop in their town centre."

A report into how to revive the High Street by retail expert Mary Portas recommends getting town centres to run more like businesses.

The government has also published research on High Streets' performance which shows that a third of them are "degenerating or failing".