The upshot of the meeting is expected to be to bring forward the unveiling of the paper to Thursday, instead of next week, provided 'core' five-year supply contracts between British Coal and the electricity companies have been signed. Earlier in the day, John Major intervened in a meeting of the Cabinet committee chaired by Lord Wakeham which is studying the fate of the 21 coal mines included in the Government's review.
But despite the entreaties of Mr Heseltine, said to have pushed for pit reprieves in double figures at least for the short to medium term, most of the 21 may still close.
The latest developments coincide with a move by PowerGen, one of the two main electricity generators, to supply power to France via the Channel link currently used exclusively for controversial imports into the UK.
The export agreement, to be announced in the White Paper, will be hailed by ministers as a breakthrough in attempts to reprieve some pits and some of the 30,000 jobs. But, at the same time, ministers have abandoned attempts to persuade the generators to buy extra coal, in addition to core amounts, over the next five years. As Mr Heseltine emphasised to MPs yesterday, the Government has no power to force sales.
Moreover, the PowerGen deal could have a minor impact only on the fortunes of the coal industry. The exports agreement, struck with Electricite de France without Government involvement, is understood to be small compared with imports, and the French company still wants the link to remain mainly one-way.
There was speculation yesterday that the current damping down of expections of a major Government U- turn could be a prelude to a modest rescue package for some pits. Mr Major's involvement in yesterday's meeting was also played down as simply taking note of progress.
But, increasingly, the Government is being driven back to defending its October closure decision as the economically correct one. The White Paper is likely to rehearse the arguments behind last October's announcement, while highlighting 'opportunities' for the extra sales that are needed if the pits are to be saved.
While the White Paper will cover the subsidy British Coal needs to attract additional sales by displacing cheap imports, it will be for the company to negotiate the contracts with the generators and other potential purchasers. There is no guarantee that the subsidy being hammered out this week will produce potential short-term reprieves for the 15 or so pits that rebel Tory MPs want saved. The White Paper is, likewise, unlikely to state any conclusions about numbers of pits, or even tonnages.
One coal industry source said: 'If there are no secured extra sales it puts British Coal in the same position it was in on 13 October last year.' He added: 'Much depends on the size and duration of the subsidy the Government is willing to provide.'
The prospects for saving jobs will also be reduced by productivity improvements at British Coal. Despite weeks of negotiation, agreements on the core contracts had still not been reached yesterday afternoon. One electricity executive said a guarantee was being sought that the White Paper would contain no 'nasty surprises'. He added: 'It need not be the White Paper itself but some kind of assurance that (the Government) has nothing up its sleeve.'Reuse content