Palm Paper has ended speculation it could buy energy generated by the controversial incinerator planned for King's Lynn, by unveiling plans to build its own power station.

North West Norfolk MP Henry Bellingham last night said the announcement could be 'the final nail in the incinerator's coffin'.

A spokesman for the consortium behind the waste burner said the announcement was 'entirely understandable' with its proposals facing a public inquiry.

Bosses at Palm Paper last year met with Cory Wheelabrator to hear its plans for an incinerator at Saddlebow. The proposed incinerator could supply power or steam to the paper mill should it be built, but no detailed talks on the subject were conducted between the two companies.

Palm Paper is aiming to submit plans to build a Combined Cycle Gas Turbine (CCGT) on its site to provide electricity and steam for the mill in the summer. The company will be launching a public consultation on its plans next week. A statement on the firm's website said: 'The paper mill consumes significant amounts of energy in the form of electricity and steam within the recycling and production processes.

'The supply of electricity is currently provided by importing power from the local electricity network, and by two package boilers generating all steam required at the mill.

'With the new 162 MW-CCGT Power Station, Palm Paper seeks to reduce its reliance on imported energy.'

Mr Bellingham said: 'I think this is an incredibly significant development. There is no doubt that Cory Wheelabrator played up the Palm Paper link in the planning application and DEFRA papers.

'Palm Paper have gone the right way about this by engaging the community, MPs and West Norfolk council.

'In my opinion, Cory Wheelabrator have not done this to the same level. I think CW has to pack their bags and leave our town. This is, in my opinion, the final nail in the incinerator coffin.'

John Boldon, spokesman for the Cory Wheelabrator consortium said: 'We respect Palm Paper's approach, which is entirely understandable given that the proposed Willows Power and Recycling Centre is about to go through a public inquiry. CCGT is one option, but steam from our facility would be another if planning permission is granted.'

Palm produces around 550,000 tonnes of newsprint every year from entirely recycled paper at the paper mill to the west of Lynn. The plant has been operational since December 2009 and employs 200 people.

The proposed CCGT would be a generating station with an output of over 50 megawatts. The facility would be powered by natural gas and use a turbine to create both electricity and steam solely for use within the paper making process at the mill.

Palm Paper has said the CCGT would ensure efficiency levels of 85pc due to the use of the combined cycle process, where the waste steam can be used within the paper mill.

Following a consultation period, an application for a development consent order will be submitted to the Planning Inspectorate, with the final decision being made by the Secretary of State.

It is anticipated the application will be submitted to the Inspectorate between July and September this year.

A statement of community consultation and preliminary environmental information has been sent to Norfolk County Council and West Norfolk council.

They have also been sent to the borough councils in North Norfolk, Breckland, Fenland, South Holland, and East Cambridgeshire and the county councils of Lincolnshire, Cambridgeshire and Suffolk.

Residents and businesses in South Lynn have also been written to directly to inform them of the proposed development and how they can become involved in the process.

Palm Paper is holding a public exhibition next Wednesday, January 30, at the South Lynn Community Centre, St Michaels Road, between 1pm and 9pm.

Members of the project team will be present and there will be the opportunity to submit a questionnaire.

The company also hopes to arrange a number of consultation drop-in events with key local groups.

Residents can view the plans at Lynn Library, between 9am and 5pm Monday to Thursday, 9am to 8pm on Fridays and 9am to 5pm on Saturdays.

They can also be seen at Gaywood Library, River Lane, between 10am and 5pm Monday, Tuesday, Friday, 10am to 8pm on Thursdays, 9.30am to 5pm on Saturdays, and 10am to 1pm on Sundays.

Anyone wishing to comment can send an email to PP3-CCGT@palmpaper.co.uk or call David Harvey, at DHA Planning, on 01622 776 226.

Letters can be sent to David Harvey, DHA Planning, Eclipse House, Eclipse Park, Sittingbourne Road, Maidstone, Kent, ME14 3EN

Any response or representation must be made before March 4 and give an address to which correspondence may be sent.

*A public inquiry into the Anglo-American consortium's application to build the incinerator in Saddlebow will start at the King's Lynn Corn Exchange on February 26.

The county council says the plant is needed to prevent the county's waste having to go to landfill. It says it will save millions of pounds a year.

Communities Secretary Eric Pickles called in Cory Wheelabrator's planning application after his department received nearly 6,000 letters - one of the biggest responses ever received for an application.