The past 50 years have seen the decline of coal as a fuel source in the UK. But, as Business Editor Julia Breen reports, thanks to developments in clean coal technology, the Government is viewing coal as part of the UK's energy needs.

IT is 21 years since the bitterest industrial dispute in British history came to an end. The miners' strike was a final attempt by communities to protect a way of life that revolved around the pits.

Then, coal was a dirty fuel, poisoning the atmosphere, and was abandoned in favour of gas during the 1990s.

The closure of the industry destroyed mining communities in County Durham and elsewhere, leaving a legacy of social problems, including unemployment, poverty and poor health.

However, advances in technology, and the volatility of global energy costs, have led the Government to put coal back on the agenda.

In the past two years, the UK has become a net importer of gas.

As with oil prices, gas costs have suddenly become volatile, largely due to the unpredictability of supplies through Europe.

Earlier this year, supplies of gas to France and Italy fell when the gas pipeline from Ukraine was interrupted, and supplies to Chechnya, caught in the grip of a cold snap, were cut off. An accident had damaged a gas pipeline.

Political uncertainties now surround gas supplies and that is reflected in fluctuating prices.

Businesses in the UK, already struggling with sky-high oil prices, now have to cope with soaring gas costs that have led to manufacturing job losses and closures.

That led to the Government proposing an energy review in which it is considering another round of nuclear power stations - and possibly utilising newly developed technology to build emission-free coal-fired stations.

On a factfinding visit to the region, energy minister Malcolm Wicks told The Northern Echo last month that he could see a future for coal - and that coal mined in Britain could play a major part in that.

The Government U-turn coal has happened in only two years. In 2003, the then secretary of state for trade and industry Patricia Hewitt indicated that coal-fired generation was in the past and gas was the way forward.

Was the closure of the mines really necessary? And will we see the Durham coalfield plundered for its black gold once again?

Paul Moran, audit director of accountants KPMG in Newcastle, says: "Coal is back in vogue. In recent times priority has been given to oil and gas as sources of energy, mainly on the grounds that these were cheaper, in plentiful supply and seen as more environmentally-friendly.

"However, the cost of oil and gas continues to increase and there are now political uncertainties over their supply.

"These factors combine to make coal look more attractive by comparison, in terms of both price and supply stability.

"Meanwhile, the renaissance of coal is further strengthened by the likelihood that future coal-fired power stations will be cleaner than in the past, with carbon dioxide emissions being stored underground instead of being released into the atmosphere to contribute to greenhouse gases.

"A large pilot plant has recently been opened in Denmark, with the support of EU funding, to test these technologies on a real-life scale."

Mr Moran says the popularity of coal was highlighted recently when the Russian mineral group Kuzbassrazrezugol secured a 51 per cent stake in Powerfuel.

Powerfuel, set up by the man once dubbed King Coal, Richard Budge, is restarting mining at Hatfield Colliery, near Doncaster, with a low-emission power station planned.

The company is expecting operations at Hatfield to have created 350 jobs by next year.

Earlier this month, The Times reported that Britain's biggest coal producer, UK Coal, was negotiating key contracts with electricity generators, expecting big increases in price.

The company was arguing that Britain needed coal to meet a major part of its power needs, and that it could not rely entirely on imports because the UK rail infrastructure could not cope.

Coal provides about 33 per cent of Britain's electricity but, this winter, that figure reached 50 per cent as generating companies moved away from gas.

Drax, in Selby, North Yorkshire, which is Europe's biggest coal-fired power station, recently floated on the stock market. Its share price has since risen so fast that it is heading for the FTSE 100.

And the Government is considering aid to keep pits open as part of a coal revival programme.

Many coal-fired power plants in the UK have been investing in devices to reduce emissions, but stronger measures are needed to meet the requirements of the Kyoto agreement.

The clean coal measures range from plants that can burn coal and biomass crops together, or a new generation of more efficient power stations.

But the most effective solution is plants that can capture the carbon dioxide emissions and pump them into underground caverns for storage.

This less proven method is being considered on Teesside, where Progressive Energy wants to build a plant. The carbon dioxide captured will be transported to oil fields in the North Sea and fed into the underground caverns, releasing trapped oil from far underground and extending the life of the oilfields by up to 20 years.

Peter Loftus, of Renew Tees Valley, the organisation set up to promote the renewable energy industry in the region, says British coal, because of its quality, was potentially ideal to be used in the carbon capture power stations.

He says: "We have been living on cheap electricity in Britain because we have been using old plants and they are getting shut down now because they are dirty.

"These new types of plants are more expensive, but not as expensive as renewables to produce."

A plant like the one being considered on Teesside could produce about 850MW of electricity- the same amount produced by 170 wind turbines.

The Government will decide on the direction its energy policy will take by the summer. Coal is definitely on the agenda, but whether it will be British coal, or coal imported from the likes of South Africa and Australia, remains to be seen.