An E.On spokesman said the economic downturn had "pushed back the need for a new plant in the UK to around 2016 because of the reduction in demand for electricity". "As a group, we remain committed to the development of cleaner coal and carbon capture and storage (CCS), which we believe have a key role to play alongside renewables, gas and nuclear, in tackling the global threat of climate change, while ensuring affordability and security of energy supplies," he said.
Andy Atkins, executive director of environmental campaign group Friends of the Earth, said the station would have "seriously undermined the UK's credibility on climate change".
He added: "The government must now show real leadership and say no to all new coal plants which aren't fitted with 100% carbon capture and storage from day one."
Despite the insistence of E.On that the decision was driven by the downturn, Oxfam's campaigns director Thomas Schultz-Jagow noted it had come after "thousands of campaigners raised the alarm about this proposal".
He suggested "the plug has been pulled on this dangerous initiative".
Camp for Climate Change Action viewed from the skies (first broadcast Aug 2009)
Greenpeace campaigner Ben Stewart, one of the so-called Kingsnorth Six who climbed the existing power station in a protest against carbon emissions two years ago, described it as "a really big setback" for E.On and "really good news for the environment".
"As time goes on people get more concerned about climate change, there's more time for renewables to get built and that squeezes out coal," he said.
"[It is now] becoming increasingly unlikely that this power station is going to be built".
E.On wants to replace the current Kingsnorth plant, due to shut in 2015, with two units it says would be 20% cleaner.
But campaigners say coal should not be part of the UK's energy future and want money spent on green technologies.
E.On first applied for permission to build a new plant at Kingsnorth in December 2006.
In October 2007 Greenpeace campaigners shut the existing plant down by chaining themselves to the conveyer belt, leading to the arrests of more than 30 activists.
Then in August 2008, an estimated 1,000 demonstrators attended a camp to protest against plans for the new power station, organised by the Camp for Climate Action.
The policing of the event was later criticised as having been disproportionate and heavy-handed.
In September 2008, six campaigners involved in the original protest went on trial for criminal damage, but all were acquitted.
Camp for Climate Action activist Dennis Stevens described E.On's decision as an "amazing victory which shows how ordinary people can take back the power from corporations and government which do not value people and the environment".
A government statement has suggested E.On still plans to build the new unit.
The Department of Energy and Climate Change said: "E.On's decision to delay their proposed project is a response to the global economic situation and they remain committed to developing clean coal."
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