Owners of the Gorgon gas project, which sits in a sensitive nature reserve off the West Australian coast, plan to bury 125 million tonnes of carbon dioxide -- two-thirds of what the plant would emit over its 20-year lifespan.

Carbon dioxide is routinely removed from natural gas during processing and is usually vented into the air, but in this case would instead be injected 2.5 kilometres (1.6 miles) underground.

"It is one of the key technologies that the world will need if we are to address climate change," Environment Minister Ian Campbell told reporters.

"This is a life and death technology we must find, we must develop, and to have the biggest injection project happening off the coast of (West Australia) is an incredibly exciting thing."

Scientists blame the emission of greenhouse gases such as carbon dioxide for global warming, which they say could have catastrophic effects on the world's environment and economy.

"The merits of the carbon injection process are very obvious for everyone to see," Campbell said. "If we don't get this right, we will simply not have a chance of saving the world from dangerous climate change."

He said the funding was dependent on environmental approval for the 11 billion dollar scheme to develop the massive natural gas field on Barrow Island by Chevron Corp and its partners Exxon Mobil and Royal Dutch Shell.

About 25 percent of all of the carbon dioxide emissions in Australia could be captured and stored underground, Campbell said.

But WWF scientist Gilly Llewellyn said she was concerned about the gas escaping from "leaky" rock formations after it has been buried.

She said that in the environmental impact assessment prepared by the developers, eight out of 20 potential failure scenarios were assessed as "possible" or "likely".

The Gorgon field has enough gas to power a city of one million people for more than 800 years.

The government's pledge to assist in minimising the controversial project's greenhouse emissions is the latest in a series of grants for projects aimed at providing a technological solution to climate change.

Australian Prime Minister John Howard has also thrown his weight behind a global carbon trading scheme to reduce greenhouse gases as he scrambles to counter criticism of Canberra's environmental policy.

Howard announced that his government, which was until very recently sceptical that climate change was a problem, was setting up a taskforce to find ways of reducing greenhouse gases.

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