CCS technology absorbs gases generated by fossil fuel power stations and stores them underground.

Miliband stated that the government would focus on up to four pilot projects.

As the UK administration establishes its climate change policy, a competition to construct the first station, declared in 2007 has been affected. Sources claim that this places the stations at risk of losing out on cash from Europe.

The energy companies competing to construct the power station include E.ON UK, RWE Npower and Scottish Power, and a contract was to be arranged by September 2009. However, sources state that at present, government officials are claiming that contractual close is not likely till late 2011.

An EU funding package allowing the UK to EUR180 million (GBP157 million) for CCS projects has to be taken by the end of 2010.

The government has maintained that the initial power station will be operational by its original goal of 2014, yet industry figures have cautioned that the timetable could discourage energy companies from investing in the UK.

Prior to committing to new stations, energy suppliers are understood to be awaiting the results of the competition.

E.ON’s Kingsnorth proposal already has planning authorization, and six contractors including Laing O’Rourke and Kier have been in negotiations with it.

The Department for Energy and Climate Change said: “We expect to announce the next stage of the competition shortly.”