Drax Group announced plans to develop three plants in the region at a cost of £2 billion, with two sites already confirmed in Immingham and Hull and a number of options being considered for the third site, including land at Drax Power Station.

Drax, which produces seven per cent of the UK's electricity, said the three new plants would make a "significant" contribution to the UK's renewable energy target, as well as supporting security of supply.

Drax Parish Council chairman Coun Ian Fenton said although the council had yet to meet to discuss the news, in theory he thought it was a good idea.

He added: "It would make sense to put it there. The only concern is impact on the local traffic infrastructure.

"Since the indication was made, I've spoken with Dr Melanie Wedgebury at Drax and she said the first choice option would be to bring the biomass in by rail transport rather than road.

"I'm also assured the bio-mass will be from generally sustainable resources rather than from rainforest destruction projects."

He added: "I think some people from Drax village might find work with the extra jobs created by further development at the power station, but not many. I think the district as a whole will benefit though."

Coun Fenton, who used to work at Drax Power Station, said he felt confident in its environmental credentials, and was sure it would do everything it could to minimise emissions.

A company spokesman said the biomass-fired generation plant would create up to 1,000 jobs in the construction phase, and then up to 60 full-time jobs operating the plant.

He said no decision had yet been made about the Drax site, but if plans went ahead, nothing would be built until 2010.