The deal helps Centrica's quest for UK-produced electricity

The five-year deal with the owners of Drax Power Station in North Yorkshire gives it access to 600mgw of power.

This can provide 8% of the electricity needed by its British Gas customers.

Centrica, with 17 million gas and electricity customers, said it would be able to supply 65% of the electricity used by its customers from UK sources.

The company is trying to reduce its dependence on expensive supplies from overseas which have seen household energy bills soar in the UK.

Coal exposure

It blamed a fresh surge in wholesale energy costs for its 22% hike in gas and electricity bills on 1 March - the fourth inflation-busting increase since January 2004.

The deal with Drax will run from October 2007 to the end of 2012 and follows last month's �151m purchase of a stake in one of the North Sea's largest oil and gas fields.

Chief executive Sir Roy Gardner said: "This agreement not only provides us with greater coal exposure but offers a further source from which we can supply electricity to our British Gas customers, in addition to our own gas and renewable generation assets."

Centrica and a string of other UK energy suppliers were fiercely criticised by consumer groups earlier this year for the hikes in household energy bills.

But the companies blamed huge increases in the cost of wholesale gas from Europe as home-based supplies from the North Sea dwindled.

Centrica said it hoped to be able to meet 75% of demand for energy from its own sources in the future - up from just 32% three years ago - as it battled to control prices.