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Jim Heathcote, CEO of ITM Power, one of Europe's largest fuel cell and electrolyser development companies, says breakthroughs in energy creation, storage and efficiency, now provide the opportunity for extensive high-tech industrial regeneration in Britain.

But Mr Heathcote warned that if Britain fails to take advantage of its current lead in the critical alternative energy sector, particularly in recognising the immense benefits of a hydrogen-based economy, another sudden rise in oil prices could severely jeopardise the country's escape from recession.

"We need a clean fuel to replace today's carbon fuels, one which is compatible with our existing energy and transportation infrastructures and one which can be generated anywhere with electricity and water," said Mr Heathcote. "That fuel is hydrogen."

His comments echo those made recently by CBI Deputy Director General John Cridland, who said businesses now saw real opportunities in a low carbon economy and energy efficiency, fields which he said offered the potential for "an industrial renaissance."

ITM Power has made major breakthroughs in hydrogen generation and is currently evaluating the many potential benefits that the fuel can bring to the automotive, home and energy storage markets. It is focussing on the development of innovative hydrogen generation systems and has modified internal combustion engines in existing cars and commercial vehicles to run on the gas, which burns like petrol, but with no CO2 emissions.

"Everyone appears to be calling for a rebalancing of the UK economy to ensure we are less dependent on the service and financial sectors, but critically it is energy security that holds back confidence and sustainable growth, and this must come from emerging industries with real growth potential," added Mr Heathcote.

"Clean energy from wind, wave or solar power - whose generation cannot be configured to meet demand - is easily converted into hydrogen, which can then act as a store to harness the benefits of renewables. Instantly, we would reduce wastage and ensure that supply matches demand.

"The opportunities for job creation and for world-leading growth are immense but the dangers of not grasping this opportunity are very real," he added. "Another spike in oil prices, which seems likely as producers attempt to offset falling revenues, could hinder the UK's escape from recession."