Cabinet split over new coal-fired power station

Plans to build Britain's first coal-fired power station since 1984 have led to a cabinet split amid concerns that the project would undermine efforts to cut carbon emissions.

John Hutton, the Business Secretary, supports a new generation of coal-fired plants and officials at the Business, Enterprise and Regulatory Reform department (Berr) are keen for the Government to approve E.ON UK's £1bn proposal to replace an outdated plant at Kingsnorth, Kent.

They hope that it will become a pioneering "clean coal" project and believe emissions from the proposed plant would be much lower than those from existing coal-fired stations.

But Hilary Benn, the Environment Secretary, is being urged by his officials at the Department of Environment, Food and Rural Affairs (Defra) to oppose the scheme unless there are guarantees it would be able to exploit new "carbon capture and storage" (CCS) technology whose effectiveness may not, in any case, be established for another 20 years. They want strict rules, including evidence that plants would be big enough to install carbon-capture technology and would be able to secure enough energy supplies for it. E.ON claims that the Kingsnorth scheme would reduce carbon emissions by almost two million tons a year and would be a ground-breaking "clean coal" plant, with the carbon emitted stored under the North Sea.

The Prime Minister may have to step in to resolve the dispute between the two departments.

A possible compromise is to commission an independent study of the Kingsnorth scheme before ministers make a decision. This could delay the final decision from the summer to this autumn. One Government source said: "There is no great policy difference and everyone wants Britain to be a world leader in carbon capture. But the two departments are coming at it from different directions."

Two weeks ago, The Independent disclosed Mr Hutton's strong support for more coal-fired stations as a means of safeguarding Britain's energy supplies. His pledge provoked sniping from some ministers, but he insists that it is in line with last year's Energy White Paper.

John Sauven, the executive director of Greenpeace, said: "Gordon Brown needs to get a grip on his cabinet. What we're seeing is ministers jostling for position. If Brown gives the go-ahead for a new fleet of coal-fired power stations, with CCS technology still unproven, it's hard to see how the UK will meet its legal requirement to reduce emissions by 80 per cent by 2050." Critics claim Berr is too close to the energy industry. Ken Livingstone, the Mayor of London, accused the department yesterday of blocking his plans for more energy to be produced closer to people's homes through combined heat and power projects.

He told The Observer: "All these civil servants know that, when they retire, there'll be a job for them on the board of British Nuclear Fuels. They know Greenpeace isn't going to give them £40,000 a year for doing two days a week on the bloody board, so they're covering their arse for their future, and advising ministers accordingly."