Australia has backed down from a climate change stand-off with the US and Japan, agreeing to a deal to cut funding for dirty coal-fired electricity by billions of dollars a year.
The deal, backed by 34 wealthy countries, is expected to give a boost to the United Nations climate summit starting in Paris in 12 days.
The compromise agreement was reached at a meeting of the Organisation for Economic Co-operation and Development (OECD) in Paris overnight on Tuesday. 
A senior White House administration official said it was a "landmark" - the first deal to include standards to reduce public financing for the dirtiest coal-fired power plants.
"If you look at plants ... funded in the last 10 years, this agreement would make 80 per cent of them ineligible," the official said. "And if you look at the forward pipeline of coal plants on the drawing board today globally, we estimate that this agreement will render more than 85 per cent of those plants ineligible."
Rich countries' export credit agencies have funded about $35 billion worth of coal over the past seven years.
Leaked documents seen by Fairfax Media last week showed Australia had opposed a US-Japan deal that effectively would have limited public financing of coal plants by OECD countries to only the "cleanest" available - mostly those classed as "ultra-supercritical" generators.
The US and Japan also wanted a clause that a coal plant could win public funding only if cleaner alternatives, such as renewables, were not viable.
Australia wanted the deal to still allow funding of large "supercritical" coal plants, which have higher emissions, and to avoid the requirement cleaner alternatives be considered.
The US official said under the compromise deal large plants can be funded only if they were ultra-supercritical - that is, if they have the latest technology and the lowest emissions possible.
Dirtier plants could be funded only if they were small and in the poorest countries.
All plants would need to be assessed on whether they were the cleanest alternative available, and if they were consistent with the country's climate change plan before winning funding. The deal will take effect in 2017. The deal includes an Australian proposal that eight countries in which fewer than 90 per cent of people have access to electricity still be allowed to build older coal technology if cleaner alternatives were not available.
The US official said it did not consider this clause significant, estimating it would affect less than 1 per cent of planned coal plants.
Trade and Investment Minister Andrew Robb said he welcomed the deal. He said it struck the right balance between reducing global emissions, and providing countries, particularly in Australia's region, with access to adequate power supplies to support development.
"The new arrangements will encourage the use of higher efficiency coal plants while addressing the energy requirements of countries like India, Indonesia and the Philippines as they continue to bring millions out of poverty," he said.
Based on Australian Treasury modelling, it is likely Australia's coal exports will fare better than those from competitor countries as the market tightens. Australia's coal is generally considered to be of better quality, and more suitable for use in lower-emission power plants.
Jake Schmidt, of the US-based Natural Resources Defence Council, said Australia had watered the deal down, but it would still send a powerful signal.