The college wants to extract 3.5 million tons of gravel from fields near the Thames at Dorney to protect its pupils from the dangers of rowing on the overcrowded river.
John Gummer, the Secretary of State for the Environment, yesterday overturned a county council decision to reject the scheme. He said it would create a national sporting asset for use by other local schools and the national rowing squad. Over half the nation's rowers live in the Thames Valley.
The college first applied for planning permission for the lake in 1983. The cost of the 10- year project would be offset by proceeds from the sale of the gravel, currently pounds 6 per ton.
Both residents and the council objected on the grounds that it would cause disruption and environmental damage. The case went to a planning appeal in May 1993, resulting in victory for Eton.
A spokesman for Buckinghamshire County Council said that it was disappointed by the decision but would co-operate 'to ensure that people who live in the area will be disturbed as little as possible'.