The Government won a Court of Appeal challenge today against a ruling which quashed its decision to grant planning permission for a £117 million waste incinerator project in Cornwall.
At the High Court in London last October, Mr Justice Collins quashed Communities Secretary Eric Pickles's decision to grant permission for the project at St Dennis.
He ruled there was a failure to properly consider whether the EU Habitats Directive required special assessment before permission was granted.
But today three judges at the Court of Appeal allowed the Government's appeal.
Lord Justice Carnwath, sitting with Lady Justice Arden and Lord Justice Moore-Bick, announced the unanimous decision of the court, saying: "I would allow the appeal and confirm the validity of the Secretary of State's decision."
The earlier High Court ruling had been a victory for Cornwall Waste Forum's St Dennis branch, which says the proposed incinerator is too big, poorly located and could pose a risk to health.
The ruling was also successfully challenged by contractor SITA Cornwall Ltd.
In March 2008, SITA applied to Cornwall County Council for planning permission which was refused in March the following year.
SITA appealed and a public inquiry was held over 36 days.
In May last year, the Secretary of State issued his decision granting permission.
The company says the incinerator will generate enough electricity to supply 21,000 homes by burning 240,000 tons of non-recyclable household waste a year.
Lawyers for SITA have said that if the project was halted, or delayed, the total cost to council taxpayers from landfill tax and other costs would rise to well in excess of £200 million.
At the High Court hearing, barrister David Wolfe, appearing for the forum, said the incinerator site was next to two European Union "special areas of conservation" at Breney Common and Goss and Tregoss Moors.
Cornwall Council welcomed today's decision.
In a statement, it said: "While we recognise that those who have campaigned against the Secretary of State's decision to grant planning permission for the Cornwall Energy Recovery Centre will be unhappy at this judgment, it will enable the council to take action to tackle the waste crisis facing Cornwall.
"As a result of this judgment, which reinstates the planning permission originally granted by the Secretary of State, the council will now be working with SITA to finalise the revised project plan.
"A report setting out the next stages of the process will be submitted to the council's cabinet."