The London Array windfarm will consist of 341 turbines in an area of 145 square miles stretching between Margate in Kent and Clacton in Essex.

The government, who today approved the scheme, will be hoping the development will go some way to their target of a 500% increase in the generation of renewable energy by 2020.

The department of trade and industry (DTI) have also approved a similar scheme in the Thames Estuary at Thanet. The £500 million Thanet farm will house 100 turbines and could be operational as soon as 2008.

Together the windfarms could deliver 1.3 GW of green electricity, which would be enough to meet the demand of a third of all homes in Greater London.

Alistair Darling, the secretary of state for trade and industry, said the decision was “a significant step forward” before claiming that Britain was now second only to Denmark in the offshore wind sector.

Environment secretary David Miliband added: “We expect this announcement will be the first of a number of large-scale offshore wind farms in the UK and will provide real impetus for the continued developments in the offshore renewable energy sector that will benefit generations to come.”