E.ON's plans to build the UK's first coal power station in more than 20 years were backed by Medway Council yesterday, leaving the government with the final decision on whether or not the controversial project will go ahead.

E.ON claims the £1bn investment would produce power 20 per cent more efficiently than the current Kingsnorth power station in Kent and could supply 1.5 million homes with energy while cutting carbon emissions by two million tons a year.

The company said that it also hoped the station would become the first to exploit carbon capture technology, whereby emissions would be captured and stored in depleted oil fields in the North Sea.

However, 9,000 people have already lodged objections to the plans and environmentalists insist that the new station would still emit 8.4 million tonnes of CO2 a year and deal a heavy blow to the UK's renewable energy industry.

"It should not be possible to make an application for such an outdated plant with no heat capture, let alone have permission granted," said a spokeswoman for the Renewable Energy Association (REA).

"This application must serve as a wake-up call to government to address the very serious system failure this exposes," she added. "They have exactly that opportunity in the forthcoming Energy Bill where they can change regulation so that the system actively prioritises green technologies and ensures investment is channelled only towards proven solutions to climate change."

The project is rapidly turning into a major test of Gordon Brown's green credentials with Greenpeace yesterday warning that if the prime minister does approve the scheme, it will lock Britain into huge carbon emissions for decades and signal his surrender on climate change targets.

"Just weeks ago the government said Britain will generate 33Gw of electricity from offshore wind," said Greenpeace executive director John Sauven. "If ministers really mean it then there's no need to build new coal-fired power stations."

He argued the technologies already exist to generate huge amounts of power without accelerating climate change, and together with energy efficiency measures and greater investment in decentralised power generation, the UK could meet its energy needs without resorting to coal-fired power.