The government kicked off its feasibility study into the proposed tidal barrage across the Severn Estuary today amidst predictions the controversial project could deliver "breathtaking" benefits in terms of tackling climate change and securing energy supplies.

The Department for Business, Enterprise and Regulatory Reform (BERR) published the terms of reference for the feasibility study, which will analyse the potential environmental, social and economic impacts of a range of possible tidal power projects, including a barrage stretching right across the Severn Estuary as well as a number of smaller scale lagoon projects.

The study, which will include a Strategic Environmental Assessment and is expected to last roughly two years, will build on recent research from the Sustainable Development Commission which estimated that a barrage could generate up to five per cent of the UK's electricity.

Business Secretary John Hutton welcomed the study and hinted at his support for the proposed project: "The impact [the Severn Barrage] could have for both securing energy supplies and tackling climate change is breathtaking," he said. "The Severn Estuary… could more than double the current UK supply of renewable electricity, and contribute significantly to targets for renewable energy and CO2 emissions reduction. We must understand the cost and the impact that a project of this scale could have, not least the environmental, social and economic effects. But the need to take radical steps to tackle climate change is now beyond doubt."

The proposals have divided both environmentalists and many within the renewable energy industry.

Some green groups and alternative energy firms have praised the planned barrage as a flagship project of the scale required to deliver emission cuts in line with the government's targets.

However, others such as the Royal Society for the Protection for Birds have raised fears about the damage the scheme could cause to local habitats.

Similarly, sources within the renewables industry have also raised concerns that the multi-billion pound project does not represent the most cost effective means of cutting carbon emissions and warned it may drain investment away from other renewable energy technologies.