Selby pit bosses were celebrating today after the complex won its second Government pay-out of more than £20 million in less than six months.

Any lingering threat to the coalfield's future evaporated with news of the new cash injection under the UK Coal Operating Aid Scheme.

Selby picked up the lion's share of the latest £21 million subsidy package, with its four pits being awarded £20.3 million.

In February, the complex received £23.2 million in the scheme's first tranche of £60 million.

energy Minister Brian Wilson said the new subsidy would help the coal industry through short-term energy market problems when production costs were higher than world market prices for coal.

He added: "The UK coal mining industry is the most efficient in Europe and the Government is committed to supporting the industry through a period of change."

Selby complex owners UK Coal - formerly RJB Mining - today hailed the latest payment, saying it would help secure almost 2,500 jobs at Selby.

A company spokesman said it had now been awarded £75 million in state aid - the maximum any one producer could receive under the terms of the aid scheme, which runs out next July.

He said that world coal prices had now almost doubled, underlining the wisdom of the Government in providing short-term support.

He added: "This money has helped to keep down electricity prices for UK consumers because the alternative would have been to import foreign coal or burn substantially more expensive gas."

UK Coal incurred losses of £37 million last year on a turnover of more than £700 million as it struggled to compete against cheap imports and the "dash for gas."

And with the subsidy scheme due to expire next year, company chiefs say it is vital that Selby pits continue to reduce production costs.

Selby MP John Grogan said the state aid had been vital to the coalfield's survival.

He said: "It illustrates that had there not been a subsidy, the Selby complex would have closed."

Mr Grogan also warned that with the aid scheme due to end next July, the Government would have to consider negotiating a new subsidy arrangement with its European partners.

Updated: 16:38 Thursday, July 26, 2001