The final go-ahead has been given by the European Commission for a new £16bn nuclear power station in the UK, in Somerset, which will have a 60-year operating life.
Commissioners approved revised plans to subsidise and operate the plant, which will be built by EDF Energy at Hinkley Point.
The commission has been examining funding for the power station under state aid rules since December.
Greenpeace and local campaigners attacked the decision, but unions welcomed the move and urged EDF to press ahead as quickly as possible with building the power station.
During the in-depth investigation, the EC said the UK had agreed to “significantly modify” the terms of the project financing.
As a result, the state aid provided will remain “proportionate to the objective pursued, avoiding any undue distortions of competition in the Single Market” said an EC statement, adding: “The modifications also reduce UK citizens’ financial contribution to the project.”
Commission Vice-President Joaquin Almunia, in charge of competition policy, said: “After the Commission’s intervention, the UK measures in favour of Hinkley Point nuclear power station have been significantly modified, limiting any distortions of competition in the Single Market.
“These modifications will also achieve significant savings for UK taxpayers. On this basis and after a thorough investigation, the Commission can now conclude that the support is compatible with EU state aid rules.”
A so-called “strike price” will be guaranteed to be paid to EDF for 35 years at around £92 per megawatt hour – twice the current market rate.
Greenpeace’s environmental legal adviser Andrea Carta said: “There is absolutely no legal, moral or environmental justification in turning taxes into guaranteed profits for a nuclear power company whose only legacy will be a pile of radioactive waste. This is a bad plan for everyone except EDF.”
The Government predicted last year that the new Hinkley Point C station, coupled with the prospect of other new nuclear sites, could reduce bills by an average of £77 a year.
The agreement with French-owned EDF Energy, will see the Somerset station begin operating in 2023. Ministers, business leaders and unions welcomed the prospect of a new generation of nuclear power stations