Local Hero can be counted among Lord Puttnam's great successes as a film producer.

But over the next 12 months the one-time saviour of the British film industry could make eco-heroes of an entire neighbourhood in West Oxford.

West Oxford's Low Carbon group, formed in the aftermath of last summer's floods, is one of ten finalists in the Big Green Challenge, with a £1m prize at stake.

And the Chariots of Fire producer is heading a judging panel whose verdict could ultimately decide whether energy production in West Oxford is transformed in the coming years.

For the West Oxford bid for the big prize is nothing if not bold. Residents want to create their own renewable electricity, harnessing the power of the River Thames by building a hydro electricity station near Osney Lock.

They hope to put up wind turbines on the western edge of the city at Harcourt Hill. And there are also plans to sign agreements with businesses in West Oxford, so solar panels can be erected on top of large commercial buildings.

Not only would the residents be involved in producing electricity from the river, wind and sun, they would be in the business of selling it to local organisations and companies.

And as if that were not enough, the profits would be ploughed back to help residents make their homes more fuel efficient.

But to land the big prize, the residents' group face having their carbon emission cutting activities monitored over the next 12 months.

They have got off to an impressive start with the news that Oxford City Council awarded a grant of £2,507 towards the cost of designing a micro-hydro electricity generating scheme at the Osney Weir, with council leader Bob Price welcoming it as "an important project".

Osney islanders have been quietly nursing their ambition to create hydro-electricity from Old Father Thames for more than five years. The idea had struck the former resident of the island, Paul Spencer, while standing on a bridge overlooking the weir.

"I was looking down at the fast-flowing water one day, when I thought, 'What a waste,' " he recalled in The Oxford Times. When he sent emails to other members of the Osney Island Residents' Association, instead of being met by mockery, there were waves of enthusiasm.

But perhaps that should be no great surprise given the remarkable expertise and commitment of Osney's residents to green causes.

Founding members of the Osney Sustainable Island Group, formed to explore the hydro- electricity idea included Ali Lloyd, an independent energy consultant, and the architect David Hammond and his wife Barbara, then working a civil servant working for a Government green energy organisation.

The Hammonds, who live in an end of terrace house facing the river, next door to the Waterman's Arms, have transformed their Victorian home into one of the city's most celebrated eco-houses.

Barbara, who previously worked for Sir David King, the Government's chief science advisor, has continued to press the case for a micro-hydro project, beside the buck gates at Osney Lock.

With the Environment Agency apparently ready to lease out the land, she believes hydro-turbines could generate 250,000 kilowatt hours of electricity a year to meet the needs of about 60 homes.

As well as saving at least 135 tonnes of carbon a year, she has no doubt it would quickly become an unlikely new visitor attraction in a corner of Oxford best known for last year's floods. "We would hope that people can come and see it working, We are thinking of how we might develop a demonstration facility around it to encourage renewables tourism."

Doubtless it would contain a brief history of the Greek scientist Archimedes, the celebrated inventor of the Archimedean screw for pushing water uphill. For thousands of years it has been used to help irrigate crops. But several years ago engineers found another use for the screw. It was realised that by reversing the process, so the weight of the water turns the screw, electricity can be generated.

It apparently works in the same way as the dynamo on a bicycle wheel: only instead of the wheel being turned by the cyclists, it's the screw being turned by the water.

The screw is installed alongside the river weir or dam, where the water is diverted from above the weir, flows down the screw and back into the river. Archimedean screws have long life spans of about 40 years and Mrs Hammond assures us that they are completely fish-friendly.

Anyone, who might think it is all a pipe dream, should note that a community-owned hydro scheme has already been built and is operated at New Mills in Derbyshire.

The facility, which will be officially opened next month, will save an estimated 4,600 tonnes of carbon emissions in its lifetime, with the community benefiting to the tune of £40,000 to £60,00 in its first ten years.

But the micro-hydro plant in Osney is viewed as only part of a far bigger green package. For if the rushing water of the Thames present an opportunity, Mrs Hammond sees the large roofs surrounding the island as another chance to harness energy.

Mrs Hammond was struck some time ago by the number of huge, south-facing expanses of crinkly tin in the neighbourhood — the perfect home for solar pv panels.

Solar pvs (photovoltaic) use energy from the sun to create electricity to run appliances and lighting. And they require only daylight, not direct sunlight to generate electricity, so they can still generate some power on a cloudy day.

The residents' group have been in talks with five local companies, including Newsquest Oxfordshire, the publishers of The Oxford Times, based in Osney Mead, about "leasing out" their roof space.

Mrs Hammond, who is now spending two days a week working on the project, with the support of her present employer, Seeda (South England Development Agency) said: "The idea is that we would sell electricity to the owners of the buildings at wholesale price and sell the surplus to the national grid. So it would give us a revenue stream, reduce carbon through the electricity generation and help to cool the buildings in summer, because the PVs effectively provide an extra layer of insulation."

The residents know it works because they have already done it at the Botley community centre, on the Botley Road, which is among the first in the country to install solar panels.

The success of the local fundraising effort meant the local community only had to contribute £1,000 to the £30,000 cost.

The centre's panels were turned on in April by Lois Muddiman, the chairman of the West Oxford Community Association.

She has no doubt that the floods of 2007 were pivotal in creating of the West Oxford Carbon group and the ambitious energy producing plans that clinched it a place in the final of the Big Green Challenge competition which is being run by Nesta (the National Endowment for Science, Technology and the Arts).

"The floods led many people to see the link between what happened and the wider issue of climate change. The world's press were camped out on the bridge and we decided to hold a demonstration. People thought it must have been carefully pre-arranged. But it was all pretty spontaneous. Other people like the Flood Alliance were involved in flood defences.

"We wanted to demonstrate about the broader climate issues."

Lois happened to have some giant letters stored in her shed , left over from an arts project, which conveniently allowed them to spell out the word 'ENOUGH'.

Various local groups like the West Oxford Waste Watchers took their place under the umbrella of the West Oxford Low Carbon.

It now has a transport, renewables and waste groups, along with a food group, which is promoting local sustainable sources of food. When Ruth Mayne, chairman of Low Carbon, reveals that a fundraising calendar is soon to be launch with "lots of allotment photographs" images begin to flicker of former Lord Mayor John Power and his friends working the land in vests. But she hastily adds all the pictures are of fresh food produce.

But the group all recognise that it is entering new territory. To win they must produce evidence that their ideas and schemes are radically reducing carbon dioxide emissions and can be copied in other neighbourhoods across Britain.

Involvement of the local community is another key factor. Soon they should be able to point to the existence of an eco-library and a virtual shed, allowing people to borrow tools like hedge trimmers and stepladders, instead of having to buy them.

More significantly 35 pilot householders are being sought. They will be the focus of green advice and back-up to bring down their carbon emissions and show just what can be achieved, with the idea of bringing down energy costs. But the idea is to bring down energy costs, rather than create super green show homes or anything as comprehensively eco-upgraded as the Hammonds' own home.

And it will be households who will benefit if the solar panels go on business premises' roofs and the Archimedean Screw gets to do its stuff. Jonathan Kestenbaum, Nesta's chief executive, is already sounding impressed. "Carbon West Oxford is a powerful contender for a share in the £1m prize fund. We know that local communities have the drive, passion and knowledge to devise innovative responses to climate change.

"Too often people only associate innovation with technology."

But not in West Oxford they don't, where people power and the Thames are looking a pretty formidable force.