Carbon produced at Hatfield would be stored under the North Sea
Plans for Britain's first coal-fired power station equipped with carbon capture technology have been backed by the European Commission.
The commission has recommended that a plant in Hatfield, near Doncaster, should receive £164m of EU funding.
The sum would be matched by a similar sum from the UK government.
If the plan gets the go-ahead it is thought 1,500 jobs will be created by the plant's construction. Work would begin in 2010, for completion in 2015.
The Hatfield scheme was judged as the third best in Europe by the commission.
It beat off rival applications for money from the Longannet coal-fired station in Fife and a proposed new power plant at Kingsnorth in Kent.
Thousands of years
The Hatfield plant will use new carbon capture and storage (CCS) technology.
The CCS technology captures the carbon released when coal burns and pipes it under the North Sea where it is stored for thousands of years.
Liberal Democrat MEP Chris Davies last year steered carbon capture and storage legislation through the European Parliament. He said: "Yorkshire is the best location in Britain from which to start CCS development.
"A network of pipelines connecting power plants and major industrial installations in the area could allow us to divert 70m tonnes of CO2 annually within 15 years."
However some climate protesters doubt the effectiveness of CCS.
Catherine Roberts, of the Camp for Climate Action, said: "Clean coal is a fairytale. CCS isn't even a proven technology yet and we urgently need to start imagining a future without coal."
A spokesperson for the Department of Energy and Climate Change said: "The UK is in a strong position on CCS and we expect to be one of the first countries in the world to demonstrate this technology."
EU member states will hold further discussions on the scheme in the European Parliament in November.