A Cabinet committee has agreed that Britain will press for an international agreement to cut sulphur emissions by 70 per cent. However, the Department of the Environment would like much tougher limits.
At the same time the Government is expected to come under pressure from partners in the European Community to agree to cuts of up to 90 per cent. The EC needs to agree over the summer on the issue in preparation for wider discussions on a new protocol on acid rain.
Electricity industry executives have warned that cuts of more than 70 per cent would lead to widespread closure of coal-fired plants. Even 70 per cent will put pressure on British Coal, which is being squeezed by gas and nuclear power.
Ed Wallis, the chief executive of the electricity generator, PowerGen, has written to the energy minister, Tim Eggar, to warn of the consequences for coal. It is also believed that National Power has had meetings with the Department of Trade and Industry to put the case against still tougher limits.
A source in one of the generators said that cuts of much more than 70 per cent would mean only two or three power stations left burning coal.
Faced with tougher limits, the generators are likely to invest instead in more gas-fired plant, which are not only cleaner but need fewer staff to run.
Last week British Coal announced a loss of pounds 588m last year in spite of sharply increased operating profits, because of the cost of redundancies, plant closures and restructuring.
The company has warned that further pit closures are inevitable unless there is a dramatic improvement in the market for coal. British Coal has shed 21,000 jobs since October but the acid rain proposals could mean thousands more will go from its workforce of about 28,000.
Ian Fells, professor of energy conversion at Newcastle University, attacked the generators' stance: 'I am fed up with the generators whingeing about the environmental constraints that the rest of the EC has to put up with as well.' He said they should take a long-term view and tackle clean coal technology.