HALIFAX, N.S. - A Cape Breton pulp mill has been given permission by the province to sell harvested Crown-land timber to a proposed electrical generation facility that would burn waste wood.

NewPage Port Hawkesbury will be required to follow strict conditions including using only stem wood for fuel supply, while tree tops and limbs will have to be left on the forest floor.

In July the province's regulator, the Utility and Review Board, declined to give a nod to the project saying it didn't have the authority to approve in advance "the prudency of the expenditure."

Premier Darrell Dexter says the government's move simply gives permission for NewPage to use wood fibre from Crown land, adding that the deal will lapse in two years if the generating facility isn't built in the Strait of Canso area.

NewPage executive Bill Stewart calls the government move an "important first step" in pursuing the project.

But Stewart says there are many challenges ahead before what he calls a complex and expensive undertaking can get to the development stage.