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The government has approved the construction of a new £400 million power station in Newport, South Wales.

Electricity generating company Carron Energy said its subsidiary Severn Power had received clearance to build the 800 megawatt (MW) gas-fired plant on the River Usk, next to its existing Uskmouth power station.

Work has already commenced at the site, from where electricity has been generated for the past 47 years, in order to prepare for the construction of the second power plant.

In a statement Carron Energy bosses claimed that the construction of the power station would create 650 jobs, with the new plant expected to open in 2010.

A gas supply for the new plant will be delivered by extending the local gas distribution network, owned by Wales and West Utilities, the company confirmed.

Commenting on the approval of the project, Carron Energy chief executive Alex Lambie said: "We are simply thrilled to get the go-ahead for this important project that will create more than 650 skilled jobs and provide vital electricity generation for South Wales."

Local MP Jessica Morden, who supported the company's bid to secure approval for the project, said the announcement of jobs and investment was "great news for the whole of Wales but particularly important for Newport East."

Severn Power have selected Siemens as the preferred bidder to provide engineering, procurement, construction and maintenance services for the new plant.

Carron Energy said the power station would take 30 months to build.