The city is considering the purchase of a plot of land in Brooklyn - the site of the state's largest oil spill - to clinch a $1 billion proposal to locate a new power plant there.

If the city bought the property at Greenpoint, it would become a "responsible party" for the cleanup of the 17-million-gallon spill that has seeped into the surrounding ground, said Department of Environmental Conservation spokesman Matthew Burns.

ExxonMobil owns the property, adjacent to Newtown Creek, which the company says it has been cleaning since 1978, but has only removed about 3 million gallons of oil.

The spill, larger than the Exxon Valdez disaster, accumulated from more than 20 years of leaks and spillage dating to the 1950s and has since spread underground to about 55 acres of industrial and residential land. Slicks often are spotted in Newtown Creek, locals say.

The city has asked TransGas, a Brooklyn-based power company, to put its proposed plant on the site rather than on the company's first choice, a slice of Brooklyn waterfront the mayor plans to redevelop in anticipation of a successful 2012 Olympics bid.

But the mammoth spill, and its continued cleanup, has clouded the relocation issue.

The city says it will discuss buying the property itself for the power plant, but only after TransGas responds to the city's relocation request by tomorrow's deadline for an answer.

"Once we sit down with TransGas, that will be one of the items we'll discuss," said Jennifer Falk of the mayor's office.

ExxonMobil says it would not sell the property to another company, possibly because of any lingering liability issues surrounding the cleanup plan it negotiated with the state. But it is interested in selling to the city.

"We would be willing to continue discussions with the city if they want to pursue it," said ExxonMobil spokesman Barry Wood. "To sell it, we would have to be indemnified of future cleanup."

TransGas declined to comment.

The huge spill in Greenpoint is just one of 11,487 uncleaned oil and chemical spills in the city, according to the DEC, which began tracking spills in 1985.