Campaigners last night breathed a sigh of relief after energy giant RWE npower put its plan to dump ash in a Radley lake on hold.

The firm had wanted to use Thrupp Lake as a tip for fly ash from Didcot Power Station.

But in a surprise announcement yesterday, RWE npower said it had signed new contracts to recycle the ash - although it refused to rule out using the lake in the future.

Campaigners from Save Radley Lakes welcomed the news, but want assurances the lake will never be used as a dump before the power station closes in 2015.

Campaigner Peter Harbour said: "I'm glad npower has recognised they can recycle the ash. It's something we have said all along they can do.

"We would like to work with them to secure a proper future for Thrupp Lake so that it doesn't get swallowed up."

Roger Thomas said: "Everybody who cares about the lakes will be absolutely delighted by this news.

"We're very pleased that npower can dispose of its ash elsewhere in the short term and we hope this will allow them time to find alternative solutions for the longer term so they will not have to use the lake at all.

"We look forward to working with npower to secure the future of Thrupp Lake as a wildlife reserve and public amenity as it has been for so many years."

Save Radley Lakes has been fighting the plan since it was unveiled in 2005.

The power firm initially said it wanted Bullfield, as well as Thrupp, to be used as a dump, but ruled out the idea early on.

However, John Rainford, manager of Didcot Power Station, refused to be drawn on the long-term future of the lake.

He said: "We take our environmental responsibilities very seriously and we will always look for opportunities to minimise the impact of what we do.

"We will keep the situation under constant review, but we won't be progressing immediately with the construction work that would be required before ash disposal could commence on site.

"It's still too early to say whether we can avoid having to use Thrupp Lake before the station's closure, but we will of course keep the local community up to date on developments."

Milder winters over the past two years have resulted in less power being generated at Didcot, which has reduced the amount of ash produced.

The company said it has secured new contracts to recycle the ash for use in industry, including road-building projects.

MP Evan Harris, who has supported the campaign, said: "I'm delighted at this news as will be my constituents who love the lakes as a local beauty spot.

"Save Radley Lakes deserve huge praise for its campaign, which not only opposed the plan to fill the lakes but did fantastic work pointing out less environmentally damaging alternatives."

Residents have battled RWE npower for more than a quarter of a century in a bid to save 11 beauty spots in Radley.

Planning permission was first granted to pump sludge from Didcot Power Station into the old gravel works in 1982.

Protesters objected, but lost the battle and nine pits were filled.

Save Radley Lakes was formed in 2005. It now has 600 members.

The group called on Oxfordshire County Council to look again at the planning permission as npower tried to fill in remaining Bullfield and Thrupp lakes.

In April 2006, a public consultation received more than 1,450 objections.

Save Radley Lakes then applied for the lakes to be granted town green status. A public inquiry investigated claims that the lakes had been used for recreation by local people for 20 years without interruption. The inspector rejected the town green application.

Campaigners refused to give up and last week launched a £40,000 appeal for funds to support a judicial review of the council's decision - getting an anonymous donation of £10,000.