Plans for a power station linking east Durham with Norway would result in a £130m investment in the area, according to the firm behind them.

National Grid International (NGI) wants to establish the electricity converter station, along with underground cables to Sunderland, on the former Hawthorn Cokeworks site, between South Hetton and Murton, east Durham.

It has applied to Easington District Council twice for planning permission, but was refused both times.

Councillors agreed with local people that the scheme would damage their quality of life, especially by its visual impact, without bringing economic or regeneration benefits.

The council's latest refusal, last Thursday, came despite warnings that the decision would be overturned by a planning inspector, and could end up costing it more than £10,000 in appeal costs.

It resulted in a public inquiry going ahead at the Glebe Centre, in Murton, today.

The inquiry is expected to conclude today, after which Deputy Prime Minister John Prescott will rule on whether the plans can go ahead.

Dr Christopher Veal, National Grid's regional director for business development, said the power station would provide major benefits.

He said: "Interconnection of the electricity systems of the UK and the Nordic countries will have significant economic benefits both in terms of electricity cost savings for consumers and local employment and inward investment in Easington District and the North-East.

"The interconnector and associated works are expected to provide more than 135 person-years of employment to Easington District and its environs.

"In total, the project will result in around £130m of equipment and labour being invested in the North-East."

David Goodman, for NGI, denied that the converter station, comprising two valve halls, two DC halls, a control building, transformers, filters and other equipment, would spoil people's views.

He said: "The majority of the converter station development would not be visible in general views from the area."

But Victor Adams, for the council, said it did not fit in with plans for the district and would harm its regeneration.

He said: "The council believes it made the right decisions for the right reasons, and that continues to be its decision."