BUILDING the controversial Severn Barrage would cost far more than the £21 billion price tag currently put on the controversial scheme, the Government has admitted.

Hooking up the 10-mile-long energy generating development between Cardiff and Weston-super-Mare, Somerset, to the National Grid would alone add an extra £2 billion to the cost.

On top of that, officials are working out how much would need to be allocated for environmental costs such as changes to flood defences.

Sarah Rhodes, the Government's director for the Severn tidal project, told MPs: "There are things like grid costs. We will need to factor in any environmental costs, for example if there are changes to flood defences, that too would be a cost on the project. There are a whole series of different calculations that will be made and we will see where that figure comes out."

Earlier this year, the Government announced it had reduced the list of ways to harness power from the estuary from 10 down to five, which includes two small-scale barrages, two lagoons and the 10-mile barrage between Cardiff and Weston-super-Mare.

It would produce 5 per cent of Britain's electricity but, despite being a clean form of energy generation, has attracted widespread criticism from campaigners who claim the impact building it would have on the environment and wildlife outweighs future benefits.

Although many miles from Gloucestershire's borders, the effects of a barrage on the county's wildlife and economy would be considerable.

Power produced by the barrage would be "expensive electricity" for the first 40 years as the capital costs were paid off but, the Commons Energy Select Committee was told, would then become cheap to provide.

In evidence to MPs, Energy minister Lord Hunt said the only way to get the project – which would be one of the largest construction schemes in the world – built was with a mix of public and private cash.

He added: "Inevitably, there is going to have to be public finance involved, certainly in the Cardiff-Weston scheme because of the sheer size of the scheme and the capital cost.

"The evidence for the smaller schemes is they could be financed and run by the private sector. Part of the work that we are now doing is looking at those options.

"Clearly, generally the energy sector is run in the private sector but with Government regulation and through the renewable obligation, incentives are put in place to encourage the development of renewables.

"The scale of what is being proposed here goes very much beyond what we have been dealing with in the past.

"It is quite clear in the case of Cardiff-Weston, there is going to need to be public money in terms of availability of capital.

"It's also clear that the cost of the electricity generation will not be viable without support."