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Plans for a new coal-fired power station at Kingsnorth, near Hoo, have been shelved.
It has been reported that energy firm E.on said electricity demand had fallen due to the recession, meaning a new plant was not needed in the UK until around 2016.
The proposal has been hugely controversial and become a focal point for protests by environmental campaigners. Kingsnorth was chosen as the venue for a massive Climate Camp in August last year.
A spokesman for E.on said: "We can confirm that we expect to defer an investment decision on the Kingsnorth proposals for up to two to three years.
"This is based on the global recession, which has pushed back the need for new plant in the UK to around 2016 because of the reduction in demand for electricity.
Emily Highmore of EON tells how this isn't the end of Kingsnorth
"As a group, we remain committed to the development of cleaner coal and carbon capture and storage (CCS), which we believe have a key role to play alongside renewables, gas and nuclear, in tackling the global threat of climate change while ensuring affordability and security of energy supplies."
Greenpeace executive director John Sauven told The Guardian: "This development is extremely good news for the climate and in a stroke significantly reduces the chances of an unabated Kingsnorth plant ever being built.
"The case for new coal is crumbling, with even E.on now accepting it's not currently economic to build new plants.
"The huge diverse coalition of people who have campaigned against Kingsnorth because of the threat it posed to the climate should take heart that emissions from new coal are now even less likely in Britain."