Birmingham is set to become one of the most environmentally friendly cities in the country after winning a substantial grant to build a green energy centre.

The Government has pledged £1.3 million to build a pioneering energy facility in the city's Eastside development.

According to plans, Aston University, Millennium Point and the city's Children's Hospital will be connected to a new efficient energy centre by late

2006. The boilers and power grid systems currently installed in the buildings will be taken out and they will be supplied with renewable electricity and heat via a network of underground pipes.

Carbon dioxide emissions will be reduced by 12,600 tonnes per annum and the figure is estimated to rise to 18,000 tonnes a year as more buildings in the area get connected to the new facility.

The £1.3 m grant will go towards the estimated £4 m costs of building the facility.

Bill Arnold, an energy consultant from Birmingham City Council's Urban Design team who are responsible for the project, said: " A similar scheme is in place in Southampton where most of the city centre, university and hospital is connected to an energy centre.

"We have seen the Southampton scheme and talked to people there and it seems to be working."

Mr Arnold said the Government had estimated that around 70 per cent of the country's gas supplies could be imported by the year 2020, and it was crucial people looked at developing other energy sources to avoid a crisis.

He said: "There is a risk associated with importing gas from abroad and we can improve our energy security by supplying our own."

Coun Paul Tilsley (Lib Dem Sheldon), deputy leader of the council, said: "This is a demonstration of the city's commitment to reducing carbon dioxide emissions."