The deal could help save thousands of jobs which have been under threat after a collapse in demand for coal.

Under the agreement, worth £1.4bn, RJB will supply 50 million tons of coal to the group through the year 2009.

The future of RJB, and Britain's coal mining industry, had been uncertain ever since the company lost its secure contracts with main power generators, PowerGen and National Power, last year.

It is now renegotiating its supply agreements with those suppliers.

Confident of more deals

John Robinson, RJB chairman, said,

"We are confident that this signals the first of a number of contracts which will secure our sales in the medium and longer term."

RJB had warned as it released its half year results last month that the failure to secure new contracts would result in pit closures.

Eastern is the UK's fourth largest electricity generator, and it is owned by the US group Texas Utilities.

In the autumn, the government's energy review said that the coal industry could expect no special favours.