China is to fast-track expansion and investment in energy saving technologies in an attempt to tackle its worsening pollution problems.

China’s cabinet, the State Council announced plans on Sunday to make the energy saving sector a "pillar" of the economy by 2015. In a statement the council said that under the new plan the environmental protection sector will grow by 15% on average annually, reaching an output of 4.5 trillion yuan (£474 billion).

China’s massive economic growth has come at a major cost to its environment and even its environmental ministry has described the country’s environmental situation as "grim".

Under the plan, environmental protection industries will receive funding from the government in an effort to stimulate technological innovation. The funding will cover a wide range of technologies that address air, water and soil pollution including energy saving products, waste disposal, electric vehicles and pollution monitoring.

Many analysts welcomed the plan and some were quoted in the Chinese media as saying that it will create opportunities for investors and will give direction to the industry.