French energy giant EDF has been given approval to build a new nuclear power station at Hinkley Point in north Somerset, it has been confirmed.
The new-build power station is part of a plan to replace 20% of Britain's ageing nuclear power infrastructure.
Approval for the construction has been confirmed by regulators at the European Commission, following prior approval by Competition Commissioner Vice-President Joaquin Almunia.
The EU examined the bid over concerns the UK Government was giving excess help to the plan.
Mr Almunia 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."
Britain has previously estimated the new build cost at £16bn but some forecasts have put the total price up to £25bn.
The EU said that under treaty rules, member states are free to determine their energy mix.
It said that the UK has decided to promote nuclear energy and this decision is within its national competence.
However, it insists that when public money is spent to support companies, the commission has the duty to verify that this is done in line with the EU state aid rules, which aim to preserve competition among member states.
Known as Hinkley Point C, it will replace the A station, which is being decommissioned, and the operational B station.
It is the first in a new generation of UK nuclear power stations.
EDF had earlier said: "A new nuclear power station at Hinkley Point will not only provide a clean, secure and affordable source of electricity for around five million homes, but it will also provide around 900 jobs at the new power stations for more than 60 years."
The lengthy building programme is expected to create 25,000 jobs for almost a decade.
The industry's trade body head, Lord Hutton of Furness, welcomed the decision and said: "The Nuclear Industry Association is pleased the deal for Hinkley Point C has been approved.
"This is an important step in securing the UK's home-grown low-carbon electricity generation while adding jobs and prosperity to the economy."
:: EDF Energy CEO Vincent De Rivaz will be interviewed by Ian King Live tonight at 6.30pm.
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