The German government has hailed a deal on extending the lifespan of the country's 17 nuclear reactors and developing renewable energy side-by-side with the support of the atomic industry as the "most environment friendly" and "efficient" energy concept world wide.

But the opposition parties and environmental groups deplored the decision to delay the phasing out of the atomic reactors as a "capitulation" to the nuclear industry and vowed to block its implementation by challenging it in parliament and by organising nation-wide protests.

They expressed fears that extending the operation of the power plants beyond 2021 phasing out deadline set by a previous government would take away the pressure to develop renewable energy and further aggravate the problem of nuclear waste disposal.

Under a deal reached by the centre-right coalition partners on Sunday, seven reactors, which were built before 1980, will continue to operate for eight years beyond 2021 while ten reactors, which were built after 1980, will get an additional extension of 14 years.

The coalition also decided to impose a special levy on the four major utility companies operating the reactors to finance the development of renewable energy.

It is estimated that the special levy would raise up to 15 billion euros in the coming years.

In addition, the energy companies will have to pay a nuclear fuel tax over a period of six years. The proposed tax is part of the government's austerity package approved by the cabinet last week and it is expected to bring an annual revenue of 2.3 billion euros.

"We will have the most environment friendly and seriously financed energy supply" anywhere in the world, Germany's Environment Minister Norbert Roettgen said. "Our concept is quite unique in the whole world."

Roettgen, who had campaigned for an eight-year extension of the operation of the reactors, said that a longer lifespan will not be a hindrance to the development of renewable energy.

On the contrary, the new concept envisages increasing the share of renewable energy in the power supply from the present level of 16 per cent to 80 per cent by the year 2050.

It will also help reduce by 80 per cent carbon dioxide emissions, one of the main causes of global warming.

Nuclear power, which presently has about 10 per cent in the power supply, is not a future technology, but it is needed as a "bridge technology to take us to the era of renewable energy," Roettgen said.

Sunday's agreement reversed a decision by the former government of the Social Democratic Party and the Green party in 2002 to shut down all reactors by 2021.

Meanwhile, the SPD and the Green party threatened the government with a legal challenge if it tries to pass a legislation on the changes circumventing the Bundesrat, the upper house of parliament, where it has no majority.