ENERGY firm E.on shelved controversial plans for a new coal power station at Kingsnorth.
The German company said electricity demand had fallen due to the recession and a new plant was not needed in the UK until around 2016.
The news came as a relief to environmental protesters who held a large Camp for Climate Change at the site in Kent last year.
An E.on spokeswoman 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.
"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."
The firm had not yet received Government permission for the plan.
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."
Oxfam’s Campaigns Director Thomas Schultz-Jagow said: "We welcome E.on’s decision not to build a new coal plant at Kingsnorth, which threatened to make climate change worse.
"Thousands of campaigners raised the alarm about this proposal and thankfully the plug has been pulled on this dangerous initiative.
"This coal plant would have affected millions of poor people, who are already having their lives turned upside down by climate change.
"It’s crucial that common sense continues in the next few weeks so that we get a climate deal in December that will make the world a safer place for everyone who lives in it."
Friends of the Earth’s executive director Andy Atkins said: "We’re delighted that E.on has shelved its Kingsnorth plans - we should be investing in clean energy sources not building new dirty coal-fired power stations.
"Plans to build this power plant have seriously undermined the UK’s credibility on climate change ahead of crucial talks in Copenhagen.
"The Government must now show real leadership and say no to all new coal plants which aren’t fitted with 100% carbon capture and storage from day one.
"The UK has one of the best renewable energy resources in Europe, but our record on developing green energy is a national disgrace.
"It’s time to make the UK a world leader in developing clean power and cutting energy waste."
The Camp for Climate Action, which targeted the Kingsnorth site in August 2008 for a protest, welcomed the news.
Activist Dennis Stevens said: "This is an amazing victory which shows how ordinary people can take back the power from corporations and government which do not value people and the environment.
"We need a social movement to develop community control of our energy supply and our society, not our current system which ignores the needs of people and the climate."
Another climate camp activist, Emma Jackson added: "E.on are finally recognising that the days of building new coal-fired power stations are over.
"Now we have to start shutting down existing power stations."
Activists are planning another demonstration against an E.on power station at Ratcliffe-on-Soar in Nottinghamshire on October 17.