The Cabinet is expected to approve a pounds 500m subsidy to the industry spread over up to five years, though it has yet to agree on how it should be raised.
Tory MPs on the Commons Trade and Industry Select Committee will challenge claims that up to seven million tons of British coal could be saved by placing a levy on French energy.
The committee's final report, due to be published on Friday, is certain to recommend the reprieve of about half the threatened pits, and the committee may take the unusual step of requesting a private meeting with the Prime Minister to discuss its findings. Michael Heseltine, President of the Board of Trade, promised to take the findings into account before compiling his proposals on energy policy.
The committee is strongly in favour of diverting some of the pounds 1.2bn levy which subsidises the nuclear industry to coal technology development. It believes Nuclear Electric is getting pounds 300m more than it needs.
Mr Heseltine said last year that demand for coal - now 65 million tons a year - would fall to 40 million at most next year and 30 million thereafter. The committee's draft report, prepared by the chairman, Richard Caborn, Labour MP for Sheffield Central, argues that this forecast can be expanded by about 20 million tons a year, saving at least 21 pits.
Some Conservatives on the committee believe that Mr Caborn's figure is an over-estimate by between five and eight million tons a year. They argue that the Government will be unable to reach agreement with the French to increase the costs of electricity supplied to Britain, and that reductions in power imported through an undersea Channel link cannot be achieved instantly.
Labour MPs remain optimistic about winning overwhelming agreement on the report. Michael Howard, Environment Secretary has been arguing that any calculations will have to take into account costs of counter-pollution measures that will be needed in coal-burning power stations.
Mr Caborn is seeking a free market in coal purchase until 1998 as well as tougher environmental controls on use of orimulsion, a mixture of tar and water.Reuse content