The money will be spent on gas and electricity interconnection, carbon capture and storage (CCS), and offshore wind projects in 2009 and 2010. During the negotiations on Thursday, MEPs and the Czech EU presidency endorsed a list of projects agreed by EU leaders in March.

The main sticking point ahead of Thursday's meeting was what to do with unspent funds from energy projects that are delayed or fall through. MEPs wanted any leftover money to be spent on energy efficiency and renewable energy projects, while governments said it should be returned to member state coffers.

The compromise will allow unspent funds to be re-channelled into efficiency and renewables projects in principle, but only if a report due from the European Commission in March 2010 confirms that certain strategic energy projects are being delayed. The commission would then have to recommend where the money should go.

A parliament spokeswoman told ENDS after the meeting that "no-one was really happy with the final outcome, which suggests it was a true compromise". The agreement must now be formally approved by EU governments and the parliament.

Follow-up: European parliament and press release. See also Czech EU presidency press release