BRITAIN'S biggest coal producer has urged the Government to pave the way for a big expansion of opencast mining in the region.

UK Coal told a committee of MPs that an unfair market structure meant power companies were importing coal from Russia and South Africa rather than using domestic supplies.

But, it warned, those supplies would increasingly come under threat as the coal was diverted to the rapidly growing economies of China and India.

One suggested solution has been an expansion of surface mining. That would have the potential to extract up to four million tonnes a year - instead of only 600,000 at present.

Asked which part of the country had the biggest reserves of surface coal, Chris Mawe, UK Coal's finance director, identified Durham and the North-East.

The call comes after the North East Chamber of Commerce called for planning rules to be relaxed to make it easier to extract surface coal.

The chamber fears a £53m industry employing 1,170 people and supporting 500 other jobs faces decline, with no planning consents after the last licence expires next year.

UK Coal was giving evidence to the all-party trade and industry select committee's inquiry into coal imports, ahead of next month's conclusions of the Government's energy review.

The review is considering Britain's growing reliance on imported gas from Russia, but not the similar reliance on imported coal.

Mr Mawe said: "UK Coal is not looking for subsidy, just for supervision of the market to make sure the indigenous coal mining industry does not wither."

The company said its preference was to exploit 300 million tonnes of available reserves at its seven deep mines - none of which are in the North-East.

About 20 per cent of the company's coal comes from ten surface mines, including Southfield, near Darlington, and Maidens Hall and Stobswood, both near Morpeth, Northumberland.