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Funding for a £165m power station in Yorkshire, which will capture carbon and create thousands of jobs in the region, is in sight say developers.

Powerfuel's Hatfield site near Doncaster was recommended for European Commission funding last month and members of the European Parliament were given six weeks to object to the scheme.

Powerfuel, headed by former UK Coal boss Richard Budge, has already beaten off competition from rival schemes from E:ON at Kingsnorth, RWE at Tilbury and Scottish Power at Longannet for the project.

Five other European sites have been selected for CCS funding, in Germany, the Netherlands, Poland, Spain and Italy.

The coal-fired power station will use carbon capture and storage technology (CCS), a process of burying climate-warming gases.

The 900 megawatt plant will use CCS technology, which involves liquefying carbon dioxide emissions by burning fossil fuels and then pumping it out to depleted gas fields.

Hatfield's location is said to be ideal for developing a CCS Cluster because of its proximity to a large number of power stations that are close to depleted gas fields in the North Sea where carbon can be safely stored and within 15 years could cut CO2 emissions by up to 60m tonnes in the region.

It is expected to generate energy for around one million homes.

The funding will come from the European Commission's energy programme recovery fund, which is allocating €1.05bn to CCS as well as €1.75bn earmarked for better international energy links.

Richard Budge, chief executive of Powerfuel, said: "We are delighted that our application for the European Economic Recovery Package funding has been successful and would like to express our gratitude to all those who have supported our project since 2002."

Yorkshire Forward has been working closely with Powerfuel and the National Grid to develop part of the scheme to build a network of CO2 pipelines linking power stations and major industrial installations across Yorkshire and Humberside.

Tom Riordan, chief executive of Yorkshire Forward, said: "This is great news for the region. There is no better place to do carbon capture and storage than Yorkshire.

"We strongly support the initiative Powerfuel has taken and we look forward to working with them in delivering our vision for carbon capture and storage in the region. This decision catapults our region on to the global stage as a leader in demonstrating commercial scale CCS."