Hundreds of underwater turbines are to be anchored to the ocean floor as part of plans to build the world’s biggest tidal farm off the north coast of Scotland.

The Crown Estate is to invite bids from Britain’s major power companies to use the ocean current to drive generators that will provide enough electricity to power a city the size of Edinburgh.

The tidal farm will be completed by 2011 and, if successful, it is anticipated that further farms will be built around the Orkney and Shetland Isles, capable of producing 25,000 megawatts, four times the peak amount currently used in Scotland.

Spare energy would be used to convert rubbish into environmentally friendly biofuel for cars, trains and aeroplanes.

Tidal turbines, 30m high, will be lowered to the ocean floor. Connected by cables which feed into a power station, they will generate power that is sent along a single cable connected to the National Grid.

The Pentland Firth, the narrow 17-mile channel between Caithness on the mainland and Orkney, is regarded as one of the world’s most treacherous stretches of water.

With some of the world’s strongest currents, it is considered a perfect location to pioneer the new form of renewable energy and has been described as the “Saudi Arabia” of tidal power.

Scottish Power is preparing to test a tidal turbine in Orkney that alone could produce enough green energy to power 500 homes.

“There’s a huge amount of potential around the Scottish coastline for tidal power,” said Jason Ormiston, chief executive of Scottish Renewables. “We’re starting to see the pieces falling into place. Clearly the Crown Estate is thinking about it and the technology is improving for commercial deployment.

“There is global interest in tidal power and Scotland is in a good position to take the lead.”

The Crown Estate, which owns seabed to a distance of 14 miles off the coast, is expected to earn profits of around £100m-a-year from the offshore renewable energy industry.

The proposal, to be unveiled tomorrow, has been welcomed by Alex Salmond, who believes it could place Scotland at the forefront of the renewables industry, producing 25% of Europe’s tidal power and 10% of wave power.

“The potential of the Pentland Firth is quite staggering. Well known for centuries amongst mariners as a rough and foreboding sea, I believe that its awesome power will soon come to be seen across the world as the centrepiece of global efforts to take green energy from waves and tides,” he said.

“The Crown Estate will play a crucial part in enabling developers to take the next step and turn tested, reliable technology into the next wave of generating stations, pumping out electricity for homes and business. A strong marine renewables sector will drive further investment, cut emissions and give us a new contribution to sustainable economic growth.”

Although most renewable developers have focused on wind power, virtually every proposal has met stiff resistance from local communities who argue that wind turbines affect tourism, kill birds of prey and create noise pollution.

Critics also point out that output is dependant on strong winds, which are intermittent.

Harnessing the energy of underwater currents is seen as the most efficient way of producing green energy and ensuring that Scotland reaches a government target of producing 50% of its power from renewables by 2020.

The Pentland Firth has been written about for centuries. In 1380, John of Fordun wrote that Scotland was bounded on the north “by the Pentland Firth, where a fearfully dangerous whirlpool sucks in and belches back the waters every hour”.

The Phoenician explorer Pytheas sailed along the British coast in around 250BC and mentioned a place called Orca where there were waves of immense size.

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