Australia's Senate has approved a controversial law on pollution after years of bitter political disputes.

Clean Energy Act will force the country's 500 worst polluting companies to pay a tax on carbon emissions from the July 1 next year.

The Senate vote is a victory for Prime Minister Julia Gillard, who had given strong support to the plan.

Environmentalists have strongly supported the regime, but there was great public outcry against it.

The opposition parties argued that the tax could cause loss of jobs and rising living costs, and pledged to repeal the law if they win the next election in 2013.

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