The Government today dropped plans to build a 10-mile barrage across the Severn estuary to generate "green" electricity from tides.
An official study said there was currently no "strategic case" for investing public money in such a scheme, the costs of which could run to more than £30 billion, although it said it could be reconsidered as a longer-term option in the future.
But the Department of Energy and Climate Change paved the way for new nuclear power plants at eight sites - Bradwell, Essex; Hartlepool; Heysham, Lancashire; Hinkley Point, Somerset; Oldbury, South Gloucestershire; Sellafield, Cumbria; Sizewell, Suffolk and Wylfa, Anglesey.
The coalition Government has already said it will give the go-ahead to companies who want to build new nuclear plants, provided there is no public subsidy involved, despite the Lib Dems opposing new nuclear power stations in opposition.
All the potential new sites are in the vicinity of existing nuclear power plants.
Three other proposed sites - at Dungeness in Kent, and Braystones and Kirksanton in Cumbria - were ruled out.
The sites were announced as part of a package aimed at providing certainty for the industry, including more detail on what would be required in terms of clean-up and the Government's policy of no subsidies.
Energy Secretary Chris Huhne said: "I'm fed up with the stand-off between advocates of renewables and of nuclear which means we have neither.
"We urgently need investment in new and diverse energy sources to power the UK.
"We'll need renewables, new nuclear, fossil fuels with carbon capture and storage, and the cables to hook them all up to the Grid as a large slice of our current generating capacity shuts down.
"The market needs certainty to make this investment happen, and we are determined to clear every obstacle in the way of this programme.
He added: "I am making clear that new nuclear will be free to contribute as much as possible with the onus on developers to pay for the clean-up."
The coalition's revised draft national policy statements on energy show that half the new energy capacity built in the UK by 2025 was expected to come from renewables - the majority of which is likely to be wind energy.
But the Government dropped plans for large-scale tidal schemes in the Severn estuary, after considering five proposals for three barrages and two "innovative" lagoon-type energy projects to harness the power of the tides.
The most high-profile of the proposed schemes was the 10-mile wide Cardiff-Weston barrage, the costs of which were originally estimated at £15 billion but which have now spiralled to more than £30 billion, according to the feasibility study published today.
The barrage, which would have harnessed the massive tidal range of the estuary to produce green power, could have met 5% of the UK's electricity needs, but was controversial with environmentalists because it could destroy thousands of hectares of habitat.
Conservation groups have been fighting the proposals which they believe could destroy the winter feeding grounds of 65,000 birds.
The barrage could also have economic impacts on the area, both positive in creating jobs for the area, and negative in damaging access to the Severn's ports and disrupting recreation such as angling.
The report published today found that the costs of a tidal power scheme would be "excessive" in comparison to other forms of low-carbon electricity generation.
It said a large-scale energy project in the Severn estuary would be costly to deliver and very difficult to finance from the private sector alone, although it did say it should not be ruled out in the longer term as a future option if market conditions changed.
The Government said it believed other options, including wind energy and nuclear power, represented a better deal for taxpayers and energy consumers.
And while it acknowledged the feasibility of a Severn barrage could change over time, and there was potential for a future review of the situation, there were no plans to do so before 2015.
Mr Huhne said: "The study clearly shows that there is no strategic case at this time for public funding of a scheme to generate energy in the Severn estuary. Other low carbon options represent a better deal for taxpayers and consumers.
"However, with a rich natural marine energy resource, world leading tidal energy companies and universities, and the creation of the innovative Wave Hub facility, the area can play a key role in supporting the UK's renewable energy future."
Gary Smith, national officer of the GMB union, said: "New nuclear power stations are absolutely essential and we need to get on and build them without further delay.
"These are very big investments and the financing has to be properly under-pinned. Carbon capture and storage and nuclear are the only real shows in town in terms of supplying the base load for electricity in a carbon-free way.
"Other sources have a role but they cannot supply the base load of electricity the UK needs."
The director general of the Institution of Civil Engineers, Tom Foulkes, expressed disappointment that ministers had not given backing to the Severn barrage.
"While we understand the logic behind the Government's decision to not provide public funding for the Severn energy project in favour of emerging technologies which can provide long-term export and expansion opportunities, we still strongly believe the Severn has potential that the UK cannot afford to let lie.
"With the potential to make a massive contribution to plugging our growing energy gap and looming environmental targets, it is very encouraging to see that despite the Government's decision there is still interest from the private sector in delivering it without public funding," he said.
But the announcement the Government was not supporting the barrage was welcomed by conservation groups.
Martin Harper, RSPB head of sustainable development, said harnessing the huge tidal power of the Severn estuary was right in the face of climate change, but it was wrong to "trash" the natural environment in the process.
"A barrage like the one proposed between Cardiff and Weston-super-Mare would not only destroy huge areas of estuary marsh and mudflats used by 69,000 birds each winter and block the migration routes of countless fish but, as confirmed by this report, it would dramatically increase risk of flooding to residential properties.
"It's a great shame that we have been fixated on outdated environmentally destructive technology.
"We have consistently called for investment in more innovative and potentially less destructive schemes on the Severn which take environmental considerations into account in their design.
"We now want the Government to announce that only truly sustainable solutions which respect the estuary, its people and its wildlife, will be considered in the future.
"Such an announcement would provide a clear signal to the engineering community and provide some much-needed incentives for the development of these technologies for use not just in the Severn but also in estuaries around the UK and elsewhere."
Joan Edwards, head of the living seas project for The Wildlife Trusts, said: "The Wildlife Trusts support the development of marine renewable technology but it must be the right technology in the right place.
"The Government appears to have recognised that the Severn Estuary is one of the UK's most incredible ecosystems, which will become even more important as species have to adapt to climate change.
"The Government must strive for a truly sustainable option for harnessing the tidal power of the Severn Estuary, with minimal environmental impact, and today we hope they have a come a step closer to achieving this."
The Wildlife Trusts also welcomed the Government's decision to rule out a new nuclear power station at Kirksanton - one of two sites in Cumbria ditched in part because of the potential impact they could have had on the Lake District National Park.
Kate Willshaw, planning officer for Cumbria Wildlife Trust, said it was "fantastic" to see that the views of local people and Trust members had been heard and that the proposal would not go ahead.
Dr Neil Bentley, the CBI's director of business environment, said: "The revised draft national policy statements on energy are a key piece of the jigsaw in attracting the investment needed to upgrade our infrastructure and move to a low-carbon economy. It is important they become law by next spring to give investors confidence to commit to big energy projects.
"The Government has rightly recognised that the UK needs to do more to bolster our energy security while cutting emissions. This will require the development of a broad mix of sources, including new nuclear power, clean coal and renewable sources, such as waste incineration. The decision to give the go-ahead for energy companies to use new nuclear reactor designs is particularly welcome.
"Tidal power has the potential to play a significant role in the UK's energy future. Given the state of the public finances, it is understandable that Government investment in the main Severn Barrage scheme has been ruled out at this time. But the Government should continue to encourage innovation in tidal power to reduce the cost of this technology."
Jim Footner, head of Greenpeace's climate and energy campaign, said: "All the government statements in the world won't change the fact that the economics of nuclear power just don't add up.
"Lib Dem voters backed a party that supported renewable energy, opposed taxpayer handouts to the nuclear industry and supported full democratic engagement in the planning process.
"Local democracy is being kicked out of the door when it comes to nuclear sites. Lib Dem supporters must be furious that local communities will have little say about nuclear power stations in their area, other than choosing the colour of the gates.
"The Liberal Democrats need to stay true to their supporters by dropping the costly distraction of nuclear power and start investing in the clean, renewable and efficient technologies that will tackle climate change and provide tens of thousands of new British jobs."
Martin Spray, chief executive of the Wildfowl and Wetlands Trust (WWT), based in Slimbridge, Gloucestershire, said it was a "shame" the Cardiff-Weston barrage plans had not been ruled out forever.
But he said: "It is a huge step forward to have the costs - both economic and environmental - and risks formally recognised in the conclusion to this study.
"WWT has supported the search for sustainable energy sources but all along we've said that any energy generation scheme on the internationally-important Severn estuary must be cost-effective and minimise environmental damage.
"The Cardiff-Weston barrage would have failed on both counts.
"The estuary provides society with a huge number of benefits, from fisheries and tourism to its unique value for waterbirds, rare habitats and incredible landscape.
"We believe that there is an urgent need for both increased energy efficiencies and low-carbon energy production to meet the challenge of climate change, but this must not come at the expense of destroying internationally-important and legally-protected areas, either now or in future."
But Pete Bungard, chief executive of Gloucestershire County Council, said it was disappointing the barrage had been axed - although understandable in the current economic climate.
"The barrage was the most expensive scheme on the table and would have needed billions of pounds of investment from the start - but it also would have generated the most power, creating an estimated 5% of UK energy," he said.
"We are still very much in favour of harnessing the tidal power of the River Severn and hope that in the future alternative technologies can still be found."
Keith Parker, chief executive of the Nuclear Industry Association said: "Our member companies are preparing to invest billions of pounds in the UK's energy infrastructure and we welcome this added clarity from Government. New nuclear build will be one of the biggest programmes of private infrastructure investment which this country has ever seen.
"These positive moves from government - coupled with a maintained forward progress - will reassure those investors that the political framework is sufficiently stable to allow that commitment to be made."
Commenting on claims that the exclusion in the National Policy Statement of two potential sites for new build, at Kirksanton and Braystones in Cumbria, was a blow to the UK nuclear industry, Mr Parker said there was still the flexibility and scope for a massive increase in nuclear, well beyond current levels.
"With the output from modern reactors being much larger nowadays we can replace half of the present nuclear output by building at just two sites in the UK. We have eight sites in total still deemed suitable by the Government. If they are all developed by utilities then our nuclear component could more than double. This could be excellent news in the fight to lower carbon emissions and ensure security of supply."
Gaynor Hartnell, chief executive of the Renewable Energy Association, said: "While we knew this was coming, it is disappointing to have the cancellation of the ambitious Severn Barrage project officially confirmed.
"We've always said that a smaller barrage, in a different location - the Humber Estuary for example - would be a sensible route forward. That way valuable experience could be gained. We wouldn't have wanted the huge potential of the Severn Estuary sterilised by a smaller scheme upstream, simply because it was more affordable."