A plan for a £25bn tidal energy barrage across the river Severn is "no knight in shining armour" for UK energy supplies.
The 11-mile tidal barrage spanning the Severn estuary could meet 5 per cent of UK's electricity demand but the proposals do not make a strong economic case and raise serious environmental concerns, the Energy and Climate Change Committee said.
Although it would be privately funded, the barrage would need high levels of Government support through long-term contracts that give a guaranteed price for low carbon power, with the costs levied on consumer energy bills.
The price that would have to be paid for the clean electricity generated by the tidal barrage would be much higher than the support expected for other low carbon technologies such as nuclear reactors and offshore wind, a report from the MPs said.
Plans for the 1,026 turbine barrage between Lavernock Point, near Cardiff, and Brean, Weston-super-Mare, have also failed to overcome serious environmental concerns, the MPs said, with a high risk of potentially damaging impacts on the natural world.
An "unprecedented" amount of habitat for birds and other wildlife such as mudflats and saltmarsh would need to be created to replace what was lost by building the barrage, while concerns have been raised about harm to fish from the turbines.
The consortium behind the plans have also failed to fully address concerns from industry, such as how the barrage would affect the surrounding ports, and although new jobs would be created, others could be lost, the MPs said.
Energy and Climate Change Committee chairman Tim Yeo, who is currently under investigation over lobbying claims, said they could not recommend the scheme by Hafren Power as presented to the MPs.
The committee's inquiry into the plans was prompted by news the consortium had met the Prime Minister to discuss proposals for a tidal barrage, and the MPs also raised concerns about the lack of detailed, publicly-available information on the project.
The Hafren Power bid is the latest in a series of proposals to harness the vast renewable energy resource of the Severn Estuary, which has the second highest tidal range in the world.
Mr Yeo said innovative solutions were needed to meet targets to slash greenhouse gas emissions while keeping the lights on and energy prices down, but the project had not demonstrated sufficient value as a low-carbon energy source to override other concerns.
There were other options which could provide a cheaper and less damaging means of cutting emissions, he said.
"Tidal energy is a vast resource which remains largely untapped. However tidal and marine projects must demonstrate their economic, environmental and technological credentials and their ability to gain stakeholder support.
"The Hafren Power proposals, having failed to achieve this, is no knight in shining armour for UK renewables."
He added: "Government should consider a more proactive approach to managing Severn tidal resources to harness its massive tidal range in the most sustainable and cost effective way."
A smaller tidal facility that could develop expertise and provide evidence before a decision is made on scaling up a project should be considered by the Government, he suggested.
Friends of the Earth's South West campaigner Mike Birkin said: "This report should bang the final nail in the coffin for the current Severn Barrage proposal. The scheme is not cost effective and has little public support.
"But the Severn Estuary could still be used to generate power; the Committee says a more proactive approach to marine renewables is needed to encourage smaller scale tidal projects.
"There are plenty of other ways to harness clean energy, on and offshore, without sacrificing our wildlife and endangering homes and people with the risk of flooding."
But Welsh MP and former Cabinet minister Peter Hain said £25bn from private investors was on standby, but the money would not be around for ever and it was up to the Government to push forward with the plans.
"The truth is this incredibly important project, promising 50,000 jobs to build the biggest ever clean green energy supply, can only succeed if the Government want it to.
"They can't sit on the fence any longer. (Energy Secretary) Ed Davey needs to take the lead and work with Hafren Power to satisfy the select committee's concerns.
"Unless he does so soon, this project is going nowhere. I have spent the past year trying to persuade the Government to make a decision. It's high time they did so."
Simon Bird, chief executive of The Bristol Port Company, said: "The select committee has read through and listened to masses of evidence and come to the only sensible conclusion that the Severn Barrage brings with it unprecedented problems.
"The barrage has been killed off by MPs, again, because it is quite simply a bad idea."
He added: "We have formed an alliance with RegenSW, the Royal Society for the Protection of Birds and the University of the West of England and together we are vigorously pursuing other technologies that will generate energy from the Severn without unacceptable damage to the environment and with real economic benefits."
A Department of Energy and Climate Change spokeswoman said: "We welcome the committee's report which supports our views on the current proposal for a Severn Barrage by the Hafren Power consortium.
"We are very keen to maximise the opportunity to extract energy from the seas around our coast, and our rivers, including the Severn Estuary. The Government is open to working with affordable, environmentally responsible projects that represent good value for consumers.
"So far we have only seen a very draft and high level outline business case from Hafren Power. Even if this proposal can meet our criteria it has a long way to go in its development. We will carefully consider the Committee's recommendations and provide a full Government response shortly."
Tony Pryor, chief executive of Hafren Power, said: “The report is unhelpful and frustrating; we all know we have a lot more work to do and we will do it.
“The Government has already told us it is not against the barrage and we are determined to press ministers and officials to engage fully. We believe the environmental and economic issues can be solved with everyone working together.
“Unlike smaller schemes, only a barrage can harness the full power potential of the estuary and do it economically. It will also be much cheaper and last much longer than offshore wind farms which have high levels of public subsidy.
“Britain needs more infrastructure projects, especially power generation. Our proposal delivers in spades: up to £25bn in private investment, 20,000 construction jobs and a further 30,000 jobs supported, and the cheapest zero carbon electricity over its lifetime.”