Concrete blocks would be built in yards across the UK and Europe then floated along rivers to build the 10 mile barrage between Lavernock Point south of Cardiff and Brean Down in Somerset.
The Sustainable Development Commission, the Government’s independent advisory body on sustainable development, has said tidal power generated by more than 200 turbines in a 10-mile barrage across the estuary could provide up to 5 per cent of Britain’s electricity.
The Department for Business, Enterprise and Regulatory Reform will now consider a study of the project.
After planning approval and construction, the barrage could be operational by the end of 2017.
The Severn Tidal Power Group, made up of engineering and construction firms Balfour Beatty, Taylor Woodrow, Sir Robert McAlpine and Alstom, has been examining the project since 1981.
Former Sir Robert McAlpine design engineer David Kerr, an expert on the project, said: “This would have huge logistics issues. But it would not be difficult and would last for up to 120 years. We would be using tried and tested methods – like we used for the oil rig platforms – which have changed little since the project was last fully considered in 1989.”
Mr Kerr added that the £15 billion Severn barrage could double up as a road or a railway line if given approval by the Government.
Roger Falconer, professor of water management at Cardiff University, said the project would need to overcome strong environmental challenges.
A report by Friends of the Earth has claimed the barrage would damage the environment and wildlife habitats.
But Professor Falconer said: “Once the barrage is completed, the water will actually be cleaner and will encourage more aquatic wildlife.
“The currents will be smaller, allowing less mud and sand to be suspended. This will let more sunlight in and will allow wildlife to flourish.”
The project study, Tidal Power in the UK, was funded by the Department for Business, Enterprise and Regulatory Reform, the Welsh Assembly, the South West of England Regional Development Agency, the Scottish Government, and the Department of Enterprise, Trade and Investment (Northern Ireland).