A coalition of conservation groups have today signalled their opposition to government plans for a £15bn tidal barrage across the River Severn capable of generating almost five per cent of the UK's electricity needs, claiming there are more cost-effective means of delivering low-carbon energy.

The UK faces EU targets requiring it to generate between 35 and 40 per cent of its electricity from renewable sources by 2020 and plans for a Severn barrage have been widely touted by many as a big part of the solution.

The proposals were also endorsed last year, albeit with a number of caveats, by the Sustainable Development Commission, which concluded in a report that a publicly owned barrage could exploit the River Severn's natural tidal energy resources and provide a major boost to the economy, while causing minimal disruption to local wildlife habitats.

That report was followed earlier this year by the launch of a two-year government consultation on the proposed project designed to assess its economic and environmental viability.

However, a new report from economic consultancy Frontier Economics - commissioned by 10 environmental groups including the RSPB, National Trust and WWF - has today argued that the project would prove uneconomic and require the Treasury to tear up rules governing public ownership of energy projects.

The report claims the barrage would be "exorbitantly expensive" and warns that the real cost would be far higher than the widely quoted estimate of £15bn, which it claims does not include "costs of land acquisition in Cardiff and Weston or the creation of new wildlife habitats to compensate for the lost land ".

Report author Matthew Bell said that "even using the most conservative estimates of costs, the barrage is one of the most expensive options for clean energy generation there is", adding that alternative forms of renewable energy would prove more cost-effective.

The report also rejects the Sustainable Development Commission's recommendations for the project to be publicly-funded and owned, arguing that such a move would require the rewriting of Treasury rules governing state ownership. "It is hard to think of reasons for the public sector to build or operate a barrage which would not be equally applicable to many other projects and assets that sit in the private sector," said Bell, adding that if private firms had not expressed interest in the proposals so far that was mainly due to the high cost of the project.

The report is the latest twist in what threatens to be a major row between environmental groups dedicated to short-term habitat conservation and those desperate to see the economy de-carbonised as quickly as physically possible.

It follows a series of objections to the proposals from wildlife groups who have claimed that the barrage would destroy nearly 86,486 acres (35,000ha) of highly protected wetlands across the estuary, affecting at least 68,000 birds and 30,000 salmon.

The government downplayed the report's conclusions insisting that it has a responsibility to investigate all clean energy sources as it seeks to combat climate change. "No technology is without its costs, be it environmental or economic, but if government says no to everything then the lights will go out," said a spokeswoman for the Department for Business, Enterprise & Regulatory Reform, which is undertaking the feasibility study into the barrage.

"Once we have carried out [the feasibility study], we will be in a position to decide - in the context of our alternative options for delivering a secure supply of clean electricity - whether we could support a Severn tidal power scheme," she added.

The RSPB's head of sustainable development Martin Harper rejected suggestions that the charity was blocking a project that could prove critical in the UK's attempts to curb carbon emissions. "We have to tackle climate change as quickly as possible and we require an energy revolution to achieve that… but that energy revolution should be achieved in harmony with the natural environment," he said. "This report has shown there is sufficient capacity to meet EU targets on renewable energy from more sustainable energy options that are also more cost-effective."

However, Charles Anglin of the British Wind Energy Association, which also represents the interest of tidal energy specialists, advised that "people should not take pre-determined positions" ahead of the completion of the government's feasibility study.

He added that should the report conclude that the project is technically and economically feasible then it would be difficult for the government to resist granting approval. "We're talking about eight Gw of power," he said. "It would be a huge chance to move away from traditional forms of energy… and most groups understand that you risk doing far more damage to the environment in the longer term if you do not invest in ways to cut carbon emissions."