Phase one is being built by Costain, primarily for the Greater Manchester Waste PFI contract.

Phase two will cost £160m and have a capacity of 375,000 tonnes a year, fed by other customers outside the Manchester  area.

Colin Drummond, chief executive of Viridor, said: “The combined Runcorn plant will be one of the largest and most efficient in Europe with a total capacity of 750kt of waste p.a., 70MW of electricity and 51MW of heat.

“Construction of phase two will be coordinated with ongoing work on phase one, which permits significant cost savings.

“It will enable phase two to come on stream by 2014/2015 by which time large scale energy from waste facilities will be cost competitive against landfill with landfill tax by then being £80 per tonne.”

Viridor said steeply rising landfill tax is driving residual waste disposal away from landfill towards energy-from-waste.

The UK could quadruple the amount of energy that it generates from waste within five years, it has been claimed.

The Confederation of British Industry has released its Going to Waste: Making the Case for Energy From Waste report which states that energy-from-waste sources could provide 6% of the country’s power by 2015.

According to business leaders, the government should encourage the use of non-recyclable waste in the EfW industry to reduce the amount of waste sent to the landfill and help meet the energy needs of the UK.

Neil Bentley, CBI director of business environment, claimed more anaerobic digestion and incineration plants should be developed.

He said: “Across Europe, generating energy from waste is common and compatible with high levels of recycling.

“The government needs to encourage the development of more anaerobic digestion and incineration plants, and tackle delays in the planning system.”