ENERGY giant E.ON has pulled out of a wave power research project in Orkney over concerns that development of the technology has been too slow.

The company had been working with Pelamis Wave Energy, based in Edinburgh, to test a wave energy converter at the European Marine Energy Centre.

It was hoped the project, launched to great fanfare by First Minister Alex Salmond three years ago, would lead to 500 homes being powered by energy from the Scottish seas. But doubts now surround the viability of the scheme after its major backer walked away.

An E.ON spokesman said it would focus renewable energy efforts on wind, solar and biomass energy instead but added that the company still believed marine energy could provide commercial opportunities in the future.

He said: "Delays in wave technology progress and a focus in E.ON on other more mature renewable technologies have been part of the decision to reduce our level of effort in the marine area.

"E.ON will continue to focus on onshore and offshore wind, biomass and solar PV. We consider marine to be a future market opportunity that we will continue to investigate."

Pelamis is working on a machine – a 1500-tonne behemoth – that harnesses power from the waves by riding on top of them.

Pelamis has vowed to press on with the project and said the decision by E.ON would not affect its plans to begin generating electricity on a commercial scale.

The company will continue to work with Scottish Power Renewables on the development of its P2 wave energy device at the European Marine Energy Centre, known as EMEC, in Orkney.

It said: "E.ON's decision at this stage does not in any way change our development trajectory.

"We will be continuing operation of the first P2 machine at EMEC over the coming months, alongside the Scottish Power Renewables-owned P2 unit. This gives us a unique platform from which to deliver the first commercial machines."

A Scottish government spokesman said: "Scotland remains a world-leading location for the development of marine energy and we currently have more different wave and tidal energy devices being developed and tested at EMEC than anywhere else in the world.

"The Scottish Government and its enterprise agencies are committed to working closely with key players in the sector both in Scotland and internationally to help unleash the benefits of marine energy."