MICHAEL SETTLE and DAVID ROSS

The UK Government's declaration that it wants to expand Britain's nuclear capacity so it becomes the nation's new North Sea oil was derided by the SNP as "madness".

The debate over green energy intensified as Scottish and Southern Energy announced a big expansion on renewables with the prospect of three new hydroelectric projects in the Highlands.

In a speech in London to Unite, Britain's largest energy union, John Hutton, Westminster's Business Secretary, said his ambition was to make the UK "the number one place in the world for companies to do business in new nuclear".

Replacing Britain's existing capacity could create £20bn of new business and up to 100,000 new jobs. Yet Mr Hutton said the nuclear industry should go beyond just replacing the current stock of 23 reactors, which provide 20% of the UK's energy, to contribute a "significantly higher proportion" of the nation's energy needs.

The revival of nuclear power in Britain together with significant investment in renewables had "the potential to be the most significant opportunity for our energy economy since the exploitation of North Sea oil and gas," he added.

However, given that Alex Salmond's Government is the final planning authority in Scotland and is opposed to any new nuclear, Mr Hutton's ambitions of a "nuclear renaissance" will be confined to England and Wales.

Mike Weir, the SNP Energy Spokesman at Westminster, said the minister had "succumbed to a severe bout of March madness in proposing a massive expansion of nuclear power in the UK".

He claimed Gordon Brown's Government was becoming "increasingly obsessed with the illusion that nuclear power is the silver bullet' to tackle climate change", which was crazy given the problems associated with atomic power, such as the disposal of nuclear waste.

He added: "Rather than chase the illusion of a nuclear quick fix' the UK government needs to put serious effort into developing renewable resources. Thankfully, Scotland has an SNP government that will prevent this nuclear madness spreading north of the Border." The row broke as Scottish and Southern Energy said it planned to resurrect Scotland's hydro power programme with new schemes in the Highlands.

The company is currently building Britain's first big scheme for about 40 years, the 100 megawatt Glendoe hydropower station, deep beneath the mountains on Loch Ness-side.

It was widely viewed as the SSE's last project, but now it wants to increase its hydro generation by a further 110 megawatts.

A year ago, Chief Executive Ian Marchant suggested there could be three other possible but unnamed sites in the Highlands. In an interview yesterday he again floated the idea but stressed that for any to go ahead the planning system would need to change by putting the global issue of climate change ahead of local concerns for flora and fauna.