You would struggle to find a lovelier view anywhere than that from Pencefn, a hilltop farm near Tregaron in mid-Wales.

Lush meadows with sheep grazing peacefully roll down towards the valley of the Teifi, renowned for its salmon and sea trout. Close by are the Cambrian Mountains, where the river begins its journey at the limpid Teifi Pools.

But dwarfing the main farm are the towers and tanks of an anaerobic digester. The Government-subsidised 'green guzzler' turns animal excrement, human food waste and specially grown rye into methane gas, which is burnt in a generator to make supposedly environmentally friendly electricity for the National Grid.

This stretch of the River Teifi was affected by the release of a slurry-type effluent from an anaerobic digester

Last December, just a few months after it was built, the digester triggered an ecological catastrophe.

Unnoticed by the farm's owners, brothers Jim and William Lloyd, a pipe from a storage vat sprang a leak.

Thousands of gallons of black, toxic slime began sliding slowly downhill across those verdant meadows to a nearby stream – a tributary of the Teifi. The result was a poisonous 'tsunami', a flood of putrid sludge that flowed down the stream and into the river for hours. The consequences were devastating, and are likely to last many years.

This week, an investigation by this newspaper has revealed:

I According to local experts, the effects of the spill are so deadly, the river may take years to recover, so ruining the local economy;

l At least 1,000 mature trout and salmon were found dead immediately, but the full toll will be many times higher;

l Poison levels in an eight-mile stretch of the Teifi were so high almost no living things survived;

l The fly-fishing season should be in full swing this month but long stretches of the river are devoid of anglers;

l Lavish Government 'green' levies on fuel bills mean Pencefn's owners – despite being the source of the deadly leak – will continue to reap tens of thousands of pounds in subsidies, while also paying nothing for their own electricity;

A Facebook user and local to the area posted this photo of a dead fish in the river after the spillage. At least 1,000 mature trout and salmon were found dead immediately

l Despite this generous Government support, no official agency checked the plant's design or safety systems before it was built, or monitored its operation;

l The ultimate cause of the leak was shoddily installed plastic pipework – and both firms responsible have now gone into liquidation;

l Although the Pencefn leak is at least the 20th 'serious pollution incident' caused by an anaerobic digester since the beginning of 2015, scores of new ones are being planned across the country – some of the biggest by 'green' tycoon and former 'new age traveller' Dale Vince of Ecotricity, who advises Labour on its energy policy.

The impact of the Teifi spill soon became apparent. Late on Saturday, December 17, locals noticed the river was covered with a foul-smelling, bubbly slick below the town of Tregaron.

Because it was dark, it was not until the following morning that the source was located at the stream flowing down from Pencefn. Local fishing guide Steffan Jones walked the riverbank shortly after. Dead fish were everywhere.

At the confluence with the Pencefn stream he said he could 'clearly see the stain of the effluent about five feet above the river level. The stain had discoloured the bank all the way down to the water. I walked the whole stretch of the contamination – seven or eight miles – and the scale of this disaster was horrifying. It wiped out every living thing in the river for eight miles'.

This anaerobic digester power plant had a pipe failure which resulted in a large effluent spillage reaching the Tiefi river last December

The slick moved downstream at 5mph, contaminating everything in its path. Residents say that at Llandysul, the most popular angling centre on the Teifi, 30 miles below Tregaron, the river still stank.

Dr Ian Thomas, president of the Llandysul Angling Association, said the timing made matters worse. Mid-December is the peak of the winter spawning season, when salmon and sea trout swim from the ocean to lay eggs in the same pools and eddies where they were spawned. Both the fish and eggs they had laid were poisoned.

'The whole river has been affected, from the estuary to the headwaters,' said Dr Thomas.

Natural Resources Wales (NRW), which deals with pollution, said after the spill it had counted 1,000 mature dead fish. But Dr Thomas said there were many more.

Freshwater biologist Frank Jones said: 'There is still no final estimate from NRW of the total number of fish killed, but it will be a very big figure. Many of the sea trout had not yet spawned, and because they spawn several times in their lifespan this will have a big impact on future generations.

It could be years before they recover.' He said the fish population, especially salmon, had already been declining because of earlier slurry spills into the river. 'Slurry is stored in vast artificial lagoons, many of them well beyond their sell-by date. Sometimes they overflow and the slurry goes into the river.'

But the anaerobic digester spill meant it may now pass a critical 'tipping point', where salmon will vanish from the Teifi altogether.

May should be the start of the fly-fishing season, and last week there were a few optimistic anglers trying their luck around Llandysul, though none in the toxic epicentre below Tregaron.

Fishing guide Harry Jackson said his business was being hit. 'Fishing on the Teifi is world famous. Many of my clients come from abroad. But word gets out and hits on my website and bookings for this year are both down 50 per cent. And if people do come to fish but don't catch anything, then they won't come back.

'It isn't just me and other guides. It's the hotels, B&Bs, self-catering cottages, pubs and restaurants. The whole local economy is affected – and believe me, this is not a high-income area.'

The value of freshwater angling to the Welsh economy is more than £100 million a year – with the Teifi the biggest source of that income.

Anaerobic digesters have been spreading fast across Britain since 2010. Not only do they leak, they sometimes explode, as one did at Harper Adams University in Shropshire in 2014, when the blast destroyed a sizeable building.

But the gas they produce is classed as renewable green energy, which counts towards Britain's green targets, hence the enormous subsidies. Some digesters pump their methane to the gas grid and currently receive £216 million a year, directly from taxation. Others, like Pencefn, which supply electricity to the power grid, are subsidised by every energy bill payer.

Pencefn power is sold to the grid at more than double the wholesale market price of electricity. According to Dr John Constable, energy editor of the Global Warming Policy Forum, if Pencefn ran its digester at only half its nominal capacity, it would generate power worth £80,000 a year to its owners, of which £50,000 would be subsidy.

Dr Constable added that the assumption that anaerobic digesters are 'good for the environment' seems to account for the staggering weakness of the safety regulations that govern them.

One Tregaron resident, who asked not to be named, said he had been shown around the Pencefn plant before it started operating and wondered about the fact it was next to the tributary stream – with no barrier in case of a leak.

Dale Vince of environmentally friendly energy supplier Ecotricity and adviser to the Labour Party on its energy policy

After the disaster he had discussed it with an NRW official: 'She told me she would never have advised them to put the digester where it is, and there were no failsafes. I don't blame the farm owners. When you're building something so potent, especially when it's getting all that subsidy, you'd expect you'd have to consult the official agencies. Yet nobody looked at their plans or inspected the plant once it was built.'

Pencefn farm lies at the end of a long, private drive, and when The Mail on Sunday called last week, owner Jim Lloyd agreed to show us around. It was clear he was an unhappy man – and though some locals see him as a villain, he is also a victim.

He took us straight to the tank – about 30ft high and 60ft in diameter – where the leak took place. It was, he admitted, 'a complete construction failure' – a U-bend in a plastic pipe that formed the tank outlet blew out under the pressure of the toxic liquid. But because it was underground, nobody noticed until the slime hit the Teifi.

He demonstrated that since the leak, at a cost of 'tens of thousands', he and his brother had replaced the pipes with high-grade industrial steel – above ground, where any future leak would be seen immediately: 'We've fixed the problem. It will not happen again.' Within a month, he admitted, the plant was operating again – and attracting subsidy.

The Lloyds may be prosecuted for breaching pollution laws. They also face civil lawsuits from angling groups and others affected by the devastation.

The river of death's grim toll... It was an ecological catastrophe – thousands of salmon and sea trout like the one pictured abover were killed when a 'green guzzler' anaerobic digester leaked thousands of gallons of toxic waste into the River Teifi. And the worst thing about last December's leak from Pencefn farm in mid-Wales? That the plant, which generates methane gas from animal and human waste, gets tens of thousands of pounds in subsidies paid by every energy bill-payer, but was never subject to inspection. Advertisement

But Mr Lloyd said: 'The problem is, we're the last man standing now. Both the manufacturer and the contractor who installed the anaerobic digester have gone bust. We believe this was their fault – and there's nothing we can do. We're on our own and we can't sue them.' Contractor Hallmark Power Ltd went into liquidation on December 16 – the day before the leak. The manufacturer, Combigas UK Ltd, followed suit on March 20 this year.

How did Mr Lloyd feel about poisoning the Teifi? 'We're completely gutted about what's happened. I'm well aware that for our small community and the tourism that sustains it, it's devastating,' he said.

Other anaerobic digester leaks have been almost as damaging. In December, the MoS revealed the case of Crouchland Biogas in West Sussex, which has received millions in subsidy yet has operated without planning permission since 2013. It sprang two huge leaks within a year, wrecking the neighbouring farmer's rare-breed sheep and cattle business.

Yet Mr Vince and Ecotricity – who are not connected to Crouchland Biogas – are pressing ahead with the first of many huge anaerobic digesters it wants to build at Sparsholt Agricultural College in Hampshire.

It had seemed earlier this year that proposed changes to subsidy levels had made this less viable, but Ecotricity spokesman Max Boon insisted: 'Our position on green gas hasn't changed. It is a massive opportunity, for the environment and economy, and a viable alternative to fracking.'

Perhaps Ecotricity should talk to the people of Tregaron. One resident asked: 'How can anyone say this is environmentally friendly?' He pointed to the bridge across the Teifi. 'You used to see salmon just there, along with big sea trout. I can tell you, there's no bloody salmon there now,' he said.

NRW said that it could not comment because its investigation is continuing.