BRITAIN'S Millennium Commission yesterday handed out a £46 million grant for a new Welsh rugby stadium from lottery money only two months after it turned down a grant for an opera house in the city.

Cardiff's world famous home of rugby, the Arms Park, will be knocked down and a new £114 million stadium will be built in time for Wales's opening game in the 1999 Rugby World Cup against the holders, South Africa.

The stadium will hold 75,000 spectators and will be the first in Britain to have a retractable roof. There will also be a fitness and medical centre, conference and hospitality suites, a rugby museum and a public plaza, all expected to create 1,400 construction jobs and 800 full time jobs.

Yesterday's announcement from the British Deputy Prime Minister Michael Heseltine, that the stadium will host musical concerts may throw doubt on plans for the £86 million Cardiff Bay opera house. Those campaigning for a rugby stadium, including the Labour MP for Cardiff West, Rhodri Morgan, last year insisted it should take precedence over any opera house plans. And the two competing bids were dubbed "a battle for the soul of Wales".

But opera house trustees insisted yesterday that the bids were not competing, and they were optimistic about their new bid for millennium funds in July.

Rugby's success was greeted with understandable joy by the Welsh rugby union world.

The WRU secretary, Edward Jones, said the stadium "will make us the envy of the sporting world".

Current winger and British Lion, Ieuan Evans, added yesterday: "We will have a stadium fit for a worldwide spectacle in 1999. Going into the new millennium Wales will have a venue to put it at the forefront of international events."