A NORTH Yorkshire power station has been given a £180 million cash boost after reaching a deal over tax issues.

Shares in Drax increased by three per cent following the announcement that the power station had made an agreement with HM Revenue and Customs to unlock money previously allocated to a debt structure put in place during a buyout in 1999.

In February, the plant recorded a profit increase of £100 million on 2009, and has lobbied the Government for increased subsidy for biomass production.

Tony Quinlan, finance director at Drax, said: “We are delighted to have brought these complex matters to a conclusion. We would like to thank HMRC for their professionalism and commitment which has allowed an efficient resolution to this process.

“If we receive appropriate regulatory support, this cash will form an integral part of the capital required to deliver our biomass strategy, which in turn will provide the UK with cost effective, reliable and flexible renewable electricity.”