The deal with telecommunications giant BT means that Npower will supply virtually all the company's power using environmentally friendly energy.

BT depots, offices and its 6,500 telephone exchanges will all be powered using renewables such as wind and hydroelectric in addition to energy saving combined heat and power schemes.

Worth several hundred million pounds, the contract will provide BT with the equivalent yearly energy needed for more than 210,000 homes.

According to independent body The Climate Change group, the deal is the world's largest ever for green energy.

Angus Berry, senior energy manager at BT, said: 'We recognise that as one of the UK's largest companies, and one of the biggest energy consumers, we have an impact on the environment and a responsibility to promote energy efficiency and reduce CO emissions. In light of this, the green supply from Npower forms the backbone of BT's environmental policy.'

The green energy contract is one of a growing number in Npower's portfolio, with other big name companies including Argos, Egg and Sainsbury's. The company also invests in renewable energy technology, operating 15 wind farms and five hydroelectric power stations. Npower was also responsible for the development of the first UK offshore wind-farm, based in North Wales.

Ian Gillard, major business account manager for Npower business, managed the BT deal. 'This is a great event for both Npower and BT. Npower is a leading supplier and producer of renewable energy in Britain and it is becoming increasingly key in our portfolio,' he said.

The Government has set a target of getting a tenth of the UK's electricity from renewables by 2010.

Although green energy is still more expensive for customers, Npower stressed this did not necessarily make it uneconomical for business.

Gordon Parsons, head of sales and marketing at Npower business, said: 'Customers who choose to 'go green' reap a host of benefits. They can potentially offset the financial impact of the Climate Change Levy, which requires businesses to source a percentage of energy from renewable sources or pay a penalty. Also, if they combine a green energy policy with an energy efficiency strategy, this can reap significant savings.'

The deal has also attracted political interest, with the Government labelling it as 'globally significant'.

Energy Minister Mike O'Brien appealed to businesses and individuals to consider 'going green'.

He said: 'Warnings this week about climate change bring into sharp focus the importance of reducing our dependence on fossil fuels and cutting damaging carbon emissions. I believe this can be achieved if all of us, whether in the boardroom or in our own homes, embrace renewables.'