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But while the decision is welcomed by industry, it has angered green campaigners who said the government must halt a plan which would increase carbon emissions and undermine the fight against climate change.

Medway Council in Kent gave the green light to the £1bn Kingsnorth plant proposed by the German-owned gas and electricity provider Eon, which argued that it was a much cleaner version of the power station it would replace, could be constructed quickly and was necessary to meet a potential shortfall in generating capacity.

The final decision on whether the Kingsnorth plant will be built rests with the business secretary John Hutton. There are rising expectations he will approve it along with a new generation of nuclear plants, also opposed by most leading environmental groups.

The design of the coal station would cut C02 emissions by 2m tonnes annually and it could be used for carbon capture and sequestration if such a technology was proved commercially viable and politically acceptable. "We're investing in cleaner coal," argued Golby, whose company is also building the London Array, potentially the world's largest offshore wind farm, off the Kent coast.

Eon received the backing of the Institution of Chemical Engineers, which said Medway Council had made a "common sense" decision that would keep the lights on in south-east England and offer a major cut in carbon emissions through the use of carbon sequestration.