A dozen projects at coal mines in Northumberland, Nottinghamshire, Warwickshire, Yorkshire and South Wales have been given extra cash to work reserves in inaccessible areas.

Private coal firms will get up to 30% of development costs as part of the new Coal Investment Aid scheme (CIA).

Energy Minister Stephen Timms says the move will not only preserve existing jobs for up to five years, but will also create a further 300.

He said despite difficult times in the last decade, there were encouraging signs for the future of the industry.

Successful mines Ellington, Northumberland Aberpergwm, West Glamorgan. Eckington, Yorkshire Hay Royds, Yorkshire Maltby, Yorkshire Kellingley, Yorkshire Harworth, Yorkshire Hatfield, Yorkshire Rossington, Yorkshire Welbeck, Nottinghamshire Thoresby, Nottinghamshire Daw Mill, Warwickshire

The selected pits have three months to accept the funds.

Mr Timms said: "I am delighted to announce this substantial investment, which will help to preserve and create jobs in our coal industry and help secure the future of mining to 2008 and beyond.

"The Coal Investment Aid scheme aims to unlock the potential of coal reserves which may otherwise remain unworked by providing a large chunk of the investment costs.

"If taken up, the award winners will see a total investment of £175m for the UK coal industry.

"The announcement demonstrates that, despite some difficult times in the past, there are encouraging signs for the future of the coal mining industry in the UK."