British scientists are involved in a £500 million project to achieve the "holy grail" of nuclear power research.

They hope to produce a clean and almost limitless source of energy by harnessing the same power that drives the sun in a prototype for the world's first nuclear fusion power station.

The researchers, at the Rutherford Appleton Laboratory, near Oxford, are part of a consortium of physicists from 11 European countries who hope to find a safe and reliable solution to the problem of dwindling fossil fuel supplies.

They will submit plans for the reactor next month to the European Commission and hope to start work on the project, called the High Powered Laser Research (HiPER) facility, within the next three years.

It is expected to provide the stepping stone between the first laboratory fusion experiments and a commercial power station. Scientists hope fusion will replace traditional fission nuclear power stations, which split atoms to produce energy.

The Government has already said it will need to build a new generation of nuclear power stations to meet Britain's electricity demands, but has met with opposition from environmentalists who object to the harmful radioactive waste produced by fission.

Fusion, by contrast, only produces very small amounts of low-grade radioactive material. It works by forcing two atoms of "heavy" hydrogen, known as deuterium and tritium, to combine into a heavier atom of helium, producing large amounts of heat in the process that can then be used to boil water and power a gas turbine.

Since hydrogen can be extracted from sea water, which contains large quantities of deuterium, the resulting energy supply will be almost limitless.

Fusion occurs naturally inside the sun, producing heat and light, but scientists have previously only been able to replicate the effect inside hydrogen bombs.

Now, however, they believe they are on the verge of achieving controlled fusion in a laboratory for the first time. An experiment at the National Ignition Facility in California is expected to demonstrate the viability of the process by the end of the decade, while the Oxford scientists continue to work on a new reactor to harness its power.

"Science is just a couple of years away from demonstrating fusion in a laboratory," said Prof Mike Dunne, director of the central laser facility at the Rutherford Appleton lab.

"The promise of fusion is huge. Fusion fuel is plentiful, it produces no carbon emissions and has no long-lived radioactive by-products or risk of meltdown. The energy we get out is about a million times more than from burning coal or oil."