NEW YORK (Reuters) - Consolidated Edison, Inc and American Superconductor Corporation have agreed to put a superconducting power line under midtown New York that should lead to a sturdier power grid able to withstand extreme weather and attacks.

The Department of Homeland Security will fund up to $25 million for the nearly $40 million superconductor cable, it calls "Project Hydra," after the mythical Greek monster that grew back multiple heads when one was severed.

High temperature superconducting cables made with ceramic materials can carry 10 times more power than traditional cables, but are costly and face technological challenges.

Superconducting cable must be cooled with liquid nitrogen to -382 degrees Fahrenheit (-230 Celsius). At that point, conductivity resistance falls, allowing the cables to carry the extra power.

The New York project will be carried out in two stages with deployment of the cable by 2010, a spokesman for American Superconductor said.