The plant would bring up to 600 construction jobs and 40 permanent skilled jobs.

Earmarked for the Hillhouse International Business Park, it is hoped the power station could also attract other industries.

Agreements to site the station has been reached between Welsh Power and landowners NPL estates although permission will be needed from central government.

NPL managing director, Simon Towers, said: "This is exciting news for the site and the area in general.

"The ability to generate power at Hillhouse will help us to attract more large manufacturing and process companies joining with those already on site, thereby securing solid employment for the future, bringing more prosperity to Wyre and adding to the vibrant business community which we have helped create."

Leader of Wyre Borough, Coun Russell Forsyth, said: "This potentially great news for the local economy."

Permission for the 850megawatt plant, which could be supplying the national grid in 2012, will have to come from government. But Wyre and Lancashire councils will be asked for views and there will be consultation with the public.

Welsh Power have bought 25 acres at Hillhouse as the beginning of the £600m project.

Alex Lambie, chief executive of Welsh Power, said: "Given the small number of sites connecting to the national grid this is a major milestone in the continuing expansion of the Welsh Power Group.

"Welsh Power prides itself on being a good neighbour, and we will ensure that Wyre Power contributes to the local economy and benefits local people. In particular we will be looking to ensure that contracts are placed locally wherever possible."

The business park currently has 45 businesses on its 800 acres, employing more than 1,400 people.