A funding package worth up to £1bn to help Britain build the world’s first ‘clean coal’ power station could be delayed, it has been revealed.

The news follows E.ON’s decision to freeze plans for a new coal plant at Kingsnorth in Kent for up to three years.

In an interview with The Times newspaper, the chief executive of E.ON UK, Paul Golby, said the Government had agreed to retain Kingsnorth in a competition for the funding, even though it would now be impossible for the project to meet a key deadline.

To qualify for the government scheme, power companies had been expected to build a 400MW carbon capture and storage (CCS) demonstration plant by 2014, writes The Times.

Dr Golby said it was possible that this date would be waived by the government.

“We are still in a process of consultation on CCS and how [the competition] will work”, Dr Golby told the newspaper.

The decision to accommodate E.ON’s request resulted in a furious reaction from ScottishPower, one of two rival groups hoping to secure the cash for other CCS projects.

The government, which has confirmed that E.ON remains a contender for the money, has never disclosed the sum available for the CCS competition.

Industry sources believe it could be up to £1bn, writes the newspaper.

A final decision on the winner is due early next year.

Clean coal is just one of the methods governments and industry bodies hope will help reduce harmful emissions.

The Modern Power Systems Expperts 2009 conference, organised by Arena Events International Events Group, which begins today and runs until 14 October in Berlin, Germany, will bring together key authorities to discuss technology to cut harmful emissions, especially in light of changing regulation.