The plant must be run at reduced load probably 250 days a year, the ministry said. The Greens, who entered Germany's first state CDU-Greens coalition earlier this year in Hamburg, had wanted to stop the 2-billion euro (US$2.8 billion) project.

In March, Vattenfall had sued Hamburg's environment department over the issue in an effort to force it to process the application immediately.

The plant with a planned capacity of 1,600 megawatts is aimed at supplying power to Hamburg's 2 million inhabitants and industry from 2012.

The anticipated start date would coincide with the closure of an old coal-fired plant at Wedel of 400 MW capacity.

Vattenfall obtained preliminary approval last November and started commissioning builders and suppliers.

The Hamburg decision is significant for the future of coal-fired power stations in Germany.

Opposition to coal plants is strong in some German locations as local initiatives have mobilised citizens against proven or alleged noxious dust emissions and sight obstructions.

In the case of Moorburg, they also said that Elbe river fish could be threatened. Vattenfall had said it would remedy this with a fish pass, which a court had said would be adequate.

The opponents to coal plants are given ammunition by the green movement which says coal burning emits too much climate-harming carbon dioxide (CO2).

But proponents say coal accounts for half the country's electricity supply and, due to pressing replacement needs as active plants age, cannot be dropped altogether, if power shortages are to be avoided.

For a table listing controversial German coal plant projects please click on

(Reporting by Vera Eckert) (US$1=.6985 Euro)