Coal-fired power stations will remain a "key source" of British energy, Cabinet minister John Hutton has said.
Mr Hutton, who is considering proposals to build a new coal station in Kent, said fossil fuels were needed to back up nuclear and renewable energy.
He said the UK was playing a leading role in "clean coal" power generation.
The Lib Dems said without carbon capture and storage technology, clean coal was "a total myth" - the Tories said that technology was years away.
'Not gesture politics'
In a speech in London, Business Secretary Mr Hutton denied that allowing fossil fuels to play a key role in power generation would undermine the UK's "leadership position" on climate change.
He said the government would lead the way on capping carbon emissions, carbon pricing and supporting new carbon capture and storage technology, "not by gesture politics".
Mr Hutton added that electricity supplies had to be flexible, particularly during winter, when nuclear and renewable energy would not be sufficient.
"What we are absolutely not prepared to do, is to rule out technology that is necessary to replace the phasing out of older power generating equipment in the UK"
"We therefore will continue to need this back-up from fossil fuels, with coal a key source of that flexibility, as we increase the proportion of renewable energy in our electricity mix."
Mr Hutton's department is considering an application from energy company E.ON to build the UK's first new coal-fired power station for 24 years, on the site of an existing power station at Kingsnorth, near Rochester, Kent.
But Greenpeace says documents it has obtained show the government gave in to pressure not to oblige E.ON to include carbon capture and storage (CCS) technology in the plans.
Energy shortages
Mr Hutton told the BBC the final decision on planning conditions was up to him, adding: "I have not made a decision in regard to Kingsnorth yet and I want to make that quite clear."
He said ministers were to consult on whether firms should have to include a commitment to CCS to win planning permission, but rejected suggestions the government was not serious about the technology.
"Kingsnorth should not be given the go-ahead unless carbon capture and storage is part of it from day one"
"But what we are absolutely not prepared to do is to rule out technology that is necessary to replace the phasing out of older power generating equipment in the UK," he added.
"Because that will expose the UK to potential energy shortages, that would damage our economy, compromise our national security."
He said it was "inevitable" that fossil fuels would be used to help provide Britain "with the energy that it needs".
But the Sustainable Development Commission chairman Jonathon Porritt said the amount of money being put into CCS development by the government and private firms was "pathetic".
'Dirty, not clean'
"Everybody says this is the 'get out of jail free' card for fossil fuels. Nobody but nobody in this country is serious about making those technologies work for a sustainable, low-carbon economy," he said.
And shadow business secretary Alan Duncan said it would not be possible to meet emissions targets with allowing new coal-fired stations.
"At the moment they are more efficient than before but in terms of carbon they are dirty and not clean," he said.
"Unfortunately the government have made such a mess of carbon capture experiments that they have put back our ability to deploy this technology by as much as a decade."
Mr Clegg said, while the government should be working to reduce UK emissions, it seemed determined to allow "a huge new polluting power station."
"Without carbon capture and storage, clean coal is a total myth. This monstrosity will only emit 20% less than previous coal-fired stations and a massive 75% more than a gas-powered plant.
"Kingsnorth should not be given the go-ahead unless carbon capture and storage is part of it from day one," he said.
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