The Government is to enter negotiations to tap the power of Iceland's volcanoes to pump low-carbon electricity into the UK.
Energy Minister Charles Hendry is to visit Iceland next month to discuss connecting Britain to its geothermal energy resources, The Guardian reported.
"We are in active discussions with the Icelandic government and they are very keen," Mr Hendry told the newspaper.
The scheme would involve laying hundreds of miles of high-voltage cables - known as interconnectors - on the ocean floor.
The newspaper said that from the next decade it would link Britain to a Europe-wide supergrid, combining the wind and wave power of northern Europe with solar projects in the south and north Africa to deliver clean, reliable power for the future.
Mr Hendry, who has already met the head of Iceland's national grid to discuss the plan, acknowledged that Britain would increasingly have to look to other countries for its energy supply.
"We will be dependent on imported energy," he said.
The interconnectors, he said, would be "an absolutely critical part of energy security and for low carbon energy".