A PIONEERING scheme could herald lower heating bills for moorland homes.

People living in the North York Moors could see their bills cut dramatically if a new project to use underground heat takes off.

The area is the first in England and Wales to have a chance of using heat pumps.

And those hit by the foot-and-mouth crisis could get extra cash to instal the necessary equipment.

Scarborough council has won funding for a ground-breaking study into environmentally-friendly domestic heating systems.

People living in the Danby and Castleton area have been urged to respond to a study which must be completed before money can become available.

The study will identify homes in the Esk valley which would be suitable for the new equipment.

The council has chosen simple, electrically-driven pumps which can extract heat from spring water or pipes buried in the ground and transfer it to the domestic system.

Heat pumps can replace inefficient and expensive oil and gas heating systems, use less fuel than traditional methods and cut carbon dioxide emissions.

Dr Tony Yates, who co-ordinates Agenda 21 for Scarborough council, said: "The government will provide extra funding to help subsidise installation of heat pumps and this could lead to jobs being created in the area.

"But to get this money we must complete the study and that depends on the number of people getting involved."

Scheme consultant Mr Peter Woods told last week's meeting of Danby Parish Council that many traditional houses in the Esk Valley were sited near where they could use spring water.

He said the pump worked like a reverse fridge but on a bigger scale.

Every kilowatt of electricity used to drive the pump yielded 3.5kw of heat. "Costs are very low," said Mr Woods.

He said installation costs of about £3,500 were roughly twice those for a traditional boiler system.

But he said people paying 3p per kw for oil or gas, would then pay less than 1p per kw to heat their home.

Mr Woods said there should be enough money to make grants to up to 20 homes for half the cost of installing the pumps.

"So the cost would then be on a par with other systems," he said. "But the government is looking for community involvement in this, driven by plans to reduce C02 emissions."

Acting chairman Coun Les Underwood said: "I have no problem with this at all."

Mr Woods said after installing a pump, he had had a £500 refund from the oil delivery company for unused fuel.

"Most Esk Valley properties will be able to use this, through pipes and bore holes," he said.

"And people who have suffered through the foot-and-mouth crisis could end up paying only a quarter of the installation costs."

Mr Peter Knapp of the Esk Valley Abbeyfield Home for the elderly is already considering the idea. "We want to run the Abbeyfield at minimum cost and have been advised a heat pump would be a good investment," he said.

"This comes at an interesting time. There is a big momentum towards meeting CO2 reduction targets and this is a very encouraging start.