BP has announced it is pulling out of the bidding because it had failed to put together a consortium for a commercially viable project which it thought had a chance of winning.

The Department of Energy and Climate Change said that the three left on the shortlist are: Peel, E.ON and Scottish Power.

The companies are vying to build a £1bn commercial scale CCS plant of a type which, if successful, would be a key part of the government’s clean energy strategy.