Scotland's first-ever hydrogen buses could be operating in less than two years after the First Minister announced funding for a fleet of the vehicles.

Alex Salmond revealed £3.3 million was being provided so that Aberdeen City Council can order 10 of the buses, which produce water vapour instead of harmful emissions.

That could be Europe's largest hydrogen bus fleet and the vehicles could be transporting passengers on routes throughout the city by early 2014.

The new environmentally-friendly buses could even be refuelled at Scotland's first large hydrogen refuelling station.

Scottish and Southern Energy Power Distribution (SSEPD) is to develop an integrated "whole hydrogen" system, which aims to harness wind energy to produce and store hydrogen. This would be used as fuel for the bus fleet and also for hydrogen-powered cars, when these become available.

Both the Scottish Government and Scottish Enterprise have committed up to £1.65m to support the initiative, which has also received funding from the European Commission and the UK Technology Strategy Board.

Mr Salmond announced the funding on a visit to Aberdeen, and said: "Hydrogen buses will produce zero local emissions.

"Aberdeen is already Europe's offshore energy capital and this exciting new project can help position it as a leading city for low-carbon technology and green transport.

"With a strong group of project partners, this initiative will boost Scotland's profile as a key hydrogen technology hub and a world-leading investment location for pioneering low-carbon energy and transport systems."

Aberdeen City Council leader Barney Crockett said the funding would make a "vital contribution to Aberdeen City Council and its partners' work to introduce a fleet of hydrogen buses to the area".

He added: "I believe this will stimulate further innovative hydrogen technology projects and attract even more high-level investment to this city."

The hydrogen-powered buses will operate on First and Stagecoach routes in Aberdeen.

Other partners in the project include the Aberdeen Renewable Energy Group, Ballard Power Systems, Scotia Gas Networks, Belgian bus manufacturer Van Hool and BOC, which is the largest provider of industrial, medical and special gases in the UK.

Giles Fearnley, managing director of First UK Bus, hailed the initiative as an "exciting, ground-breaking project that we are delighted to be a part of."