The Pelamis has already been exported to Portugal

The Pelamis device has been tested at the European Marine Energy Centre (Emec) on Orkney by Leith-based company Ocean Power Delivery.

Scottish Power wants to commission four more at the same site.

Deputy First Minister Nicol Stephen announced a £13m funding package that will also allow a number of other marine energy devices to be tested.

Ocean Power Delivery has already exported the Pelamis for use in a commercial wave farm.

The large, tubular segments were taken to a site off the northern coast of Portugal last year for a project which aimed to generate enough power for 1,500 households.

At that stage the company warned that the industry could be forced to quit Scotland if there were no opportunities to use the technology closer to home.

Scotland has the potential to generate a quarter of Europe's marine energy

Nicol Stephen

Deputy first minister

Now Scottish Power is planning a venture which it believes could create enough power for 2,000 homes.

The biggest single handout of more than £4m will go to a Scottish Power subsidiary, CRE Energy, which will build the wave farm.

Mr Stephen said: "Today marks a vital milestone in Scotland's drive to be the world leader in the development of marine renewables."

Create jobs

Of the Pelamis scheme, he said: "This will be the world's biggest commercial wave project - significantly bigger than the major Portuguese scheme.

"Scotland has the potential to generate a quarter of Europe's marine energy and kick-starting the sector is vital if we are to create a significant industry based in Scotland and meet our long-term renewables targets."

Mr Stephen said the industry had the potential to create thousands of jobs and attract millions of pounds of investment.

Scottish Power's director of renewables, Keith Anderson, said: "This is a massive step forward.

"It will be a test of the actual devices that will be used commercially and, if successful, should help propel Scotland into the forefront of marine energy throughout the world."

'Emerging economies'

Emec managing director Neil Kermode said: "We are delighted to see this level of support from the Scottish Executive.

"It sends a clear signal that the executive is determined to push forward the development of tidal and wave technologies - technologies that will unlock the enormous renewable energy potential of our coastal waters.

Mr Stephen said it was an exciting development for Scotland

"The technology is moving forward, but we must never underestimate just how difficult - and expensive - an environment this is to work in."

Friends of the Earth Scotland's chief executive, Duncan McLaren, said: "Wave and tidal power could supply a fifth of UK's electricity needs and Scotland is ideally placed to generate significant amounts of this pollution-free energy.

"It is critical that we see full-scale devices in our waters soon, otherwise the world-leading expertise Scotland has built up will rapidly depart these shores."

Green speaker on energy, Shiona Baird MSP, said: "Any investment is to be welcomed - but it pales into insignificance with the Portuguese project.

"Despite the gusto with which this announcement is being made, ministers remain determined to build more roads and expand airports, so it's going to take a lot more than this to reduce climate pollution."