Energy giant E.ON has signed a £2.3m deal to support energy efficiency and renewable micro-generation schemes in Stoke, as part of the city council's bid to create the UK's "first sustainable city".

The money comes is being provided as part of the government's Community Energy Saving Programme (CESP), which started in 2008 and requires 10 of the UK's largest energy suppliers to fund and deliver energy efficiency and other low carbon measures to low income homes.

Solar panels, external wall insulation, energy efficient boilers and air source heat pumps are all being considered for the scheme, which could eventually reach 5,000 homes out of the council's 19,000-strong housing stock.

E.ON is also considering expanding the project to provide renewable energy to local businesses and is investigating building a solar plant on unused commercial or council land. Although the company counselled that the project is at the very early stages of planning.

The energy giant said that it has also committed to a long-term partnership with the council, which will see it become the first energy supplier to join a council-led low carbon task force.

As a first step in this partnership, E.ON will provide solar panels to 54 council properties by Christmas, making them eligible for payments under the feed-in tariff scheme.

The city council is investing a total of £1.8m from its housing capital programmes in the various initiatives, which it said would also attract £7m of private sector investment from energy suppliers over the next two years.