Birmingham business leaders have welcomed Prime Minister Tony Blair's announcement that nuclear power will be put back on the agenda to combat the country's impending power crisis.

Nearly 60 per cent of companies that took part in a Birmingham Chamber of Commerce and Industry survey said an energy shortage could potentially disrupt their production.

On the strength of that, the chamber has been campaigning for a programme to build new nuclear capacity.

Responding to Mr Blair's announcement, chamber policy executive Charlotte Ritchie said: "Businesses require a substantial level of energy usage to function and given current economics and the UK's responsibility to achieve a reduction in carbon emissions through the Kyoto targets, they see nuclear as the only realistic option.

"However, nuclear will not solve the problem on its own.

"A balance of renewable energy sources along with gas and nuclear needs to be found to deliver a sustainable supply in the long term.

"Diversity of supply is crucial to maintaining security. It is vital we the development and maintenance of a wide range of energy sources are promoted to avoid the vulnerability of over dependence on one prime source.

"Renewable energy sources should play a larger part in supplies, but are unlikely to be able to produce the necessary level of consistent supply required by industrial and consumer demand."

Ms Ritchie stressed the chamber's opinion that no more than 50 per cent of the UK's energy should come from one source.

"The country must have a balanced approach to energy supply and should aim to be self sustainable," she said.

"Tax breaks for those companies willing to invest in R&D for new technology would be necessary and will benefit the UK economy in the long term, by enabling UK companies to export knowledge and technology.

"The West Midlands as a region has a lot to offer in terms of providing the skills, maufacuring expertise and research and development for a new nuclear industry and we hope that this announcement will bring significant business opportunities for our region's companies."

Mr Blair said on Tuesday that Britain risked being totally dependent on foreign supplies of energy unless it built up to 20 modern reactors.

The plan is to site the new reactors within existing nuclear power stations in an attempt to avoid objections.

Pre-empting the Government's forthcoming energy review, he said he was faced with "stark evidence" that nuclear should be put back on the agenda "with a vengeance".