Work to determine the potential of the tidal energy generator in the Severn Estuary will be done by the consortium led by consulting firm Parsons Brinckerhoff.

The Strategic Environmental Assessment, a major part of the Severn Tidal Power Feasibility Study, is the next step in the project and will provide analysis of how the environment around the estuary will be affected by the project.

Secretary of State for Energy John Hutton said the tidal energy resource in the Severn Estuary provides the largest potential of all of Britain's estuaries for renewable electricity generation.

"A Severn tidal power project could be larger in size, output and cost than any other energy project in this country, and it has the potential to generate up to 5 percent of the U.K.'s electricity demand," Hutton said.

The project also has the support of the Welsh Assembly government, said Minister for the Environment Jane Davidson.