HUGE underground caverns on Portland are set to boost Britain's gas reserves by a quarter in a £350 million project.

And work on a 23-mile underground pipeline to link the island and the national network at Mappowder in North Dorset is expected to start within three years.

If it wins planning permission the scheme will create 25 new jobs.

Yesterday, West Dorset District Councillors agreed planning permission for the pipeline project should be delegated to Dorset County Council because the pipeline stretches across four local authorities.

Andrew Hindle, managing director of Egdon Resources which owns Portland Gas Ltd, said: "Essentially it is an extension of the national network. If all goes to plan the 36in pipe will be laid over a summer and put in before the first gas is stored in 2010.

"There have been quite a few misconceptions about the caverns the gas will be stored in - namely the suggestion that they are already there.

"That is not the case. They will be created 2,400 metres below the surface."

Mr Hindle said the entire project was set to be completed by 2013.

Once dug out, the salt caverns will be capable of storing a billion cubic metres of gas - the UK's current total capacity is four billion cubic metres.

Mr Hindle said that by the time it was up and running other storage facilities would have been built.

He said: "Eventually it'll probably be responsible for storing about a fifteenth of the nation's gas."

Last year the Government called for more storage facilities to be built because the nation is too reliant on imported gas - if supply is disrupted Britain would run out of gas in just 17 days.

Mr Hindle said: "We're hopeful about the way this is moving forward. We've spent two years doing environmental impact studies and consulted with agencies."

Investment bank NM Rothschild will lead fundraising for the development. The £350million costs will mostly be met by debt but new Portland Gas shares could be placed on the market to raise more funds. Portland Gas Limited confirmed the success of a feasibility study to store gas in underground caverns in September last year.