He said: “Giving the go ahead today that new nuclear power should play a role in providing the UK with clean, secure and affordable energy is in our country’s vital long term interest.

“Set against the challenges of climate change and security of supply, the evidence in support of new nuclear power stations is compelling. We should positively embrace the opportunity of delivering this important part of our energy policy.

"The Government believes it is in the public interest that new nuclear power stations should have a role to play in this country’s future energy mix alongside other low-carbon sources, that it would be in the public interest to allow energy companies the option of investing in new nuclear power stations and that the Government should take active steps to open up the way to the construction of new nuclear power stations.

“It will be for energy companies to fund, develop and build new nuclear power stations in the UK, including meeting the full costs of decommissioning and their full share of waste management costs."

The long awaited but expected announcement was criticised by environmental campaigners, who are threatening legal action over the Government’s consultation about nuclear power.

But the Government said the Energy Bill included measures to ensure adequate funding provision was made by potential developers of new nuclear power stations, drive greater and more rapid deployment of renewables, create the framework for investment in carbon capture and storage, which ministers said had the potential to reduce the carbon emissions from fossil fuel power stations by up to 90%, and enable investment in new offshore gas infrastructure projects.

The minister told MPs: “Nuclear power has provided us with safe and secure supplies of electricity for half a century. It is one of the very few proven low carbon technologies which can provide baseload electricity. Nuclear power currently provides us with around 19% of our electricity.

“Nuclear power will help us meet our twin energy challenges - ensuring secure supplies and tackling climate change.”

"Nuclear power is a tried and tested, safe and secure form of low carbon technology. It would be wrong in principle to rule it out now from playing any role in the UK’s energy future.”

Mr Hutton added the Government had concluded that new nuclear power stations should have a role to play “in this country’s future energy mix alongside other low-carbon sources” like renewables.

“The view of the Government is that it is in the public interest to allow energy companies the option of investing in new nuclear power stations - and that we should therefore take the active steps necessary to facilitate this.”

Analysis of future gas and carbon prices showed nuclear was “affordable and provides one of the cheapest electricity options available to reduce our carbon emissions”.

Energy suppliers recognised that in a world of high fossil fuel prices, nuclear power made “commercial sense”.

The Commons announcement was greeted by muted cheers from the Tory benches but stony silence from Labour.

Shadow business secretary Alan Duncan said: “There’s never been a more pressing time for responsible policy-making.

“Carbon emissions are changing our climate, we are paying 100 dollars for oil, and we are facing a clear and massive energy shortfall. It is our duty to set aside political scrapping so as to make sure we do what’s right for our country.

“Where we can find agreement with the Government, we are up for it and we will do so.

“Our view on nuclear is clear - we must refine the planning system, we must have a price for carbon to establish a long-term climate for investment, we must ensure there is clarity on waste and decommissioning but on no account should there be any kind of subsidy for nuclear power.”