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Shadow Welsh Secretary Peter Hain says scrapping the Severn barrage plan would be "equally disastrous" for the economy and the environment.

Energy Secretary Chris Huhne is expected to officially announce the end of the £30bn Severn tidal energy project later.

Reports suggest the UK government has re-thought the scheme because it is not "financially viable".

The Department of Energy and Climate Change would not confirm or deny it.

Mr Hain said the change of heart marked a "terrible day for Wales" but environmentalist group Friends of the Earth Cymru (FOE) welcomed the decision.

The 10-mile long tidal barrage would be built between Lavernock Point near Cardiff, to Brean Down near Weston-super-Mare.

Supporters of the project argue it could generate up to 5% of Britain's electricity - equivalent to two nuclear power stations.

But those opposed to it, including FOE and the Royal Society for the Protection of Birds (RSPB), have always argued it would have an irreversible impact on the wildlife of the Severn estuary.

Mr Hain said: "This is a decision that is equally disastrous for the Welsh economy and our environment.

"Not only is Chris Huhne turning his back on the proposed barrage scheme that would have created hundreds of good quality green jobs for Welsh people, it appears that he decided to abandon in its entirety the idea of using the Severn Estuary as a generator of electricity.

He said the UK government had "decided to shift their attention, but minimal funding" to technologies which "may not deliver a single kilowatt of clean energy in the foreseeable future".

Mr Hain accused the coalition government of hiding behind cost, arguing the scheme would have been privately funded, with the only public cost related to planning.

"It is a terrible day for Wales and demonstrates once again how little regard this Government has for the Welsh people," he added.

Liberal Democrat peer Mike German, who chaired the party's inquiry into the Severn barrage options which rejected the major barrage in favour of a smaller option, welcomed the prospect of the scheme being scrapped.

"First of all it's hugely expensive," he said. "It could be very damaging to the environment. It would be damaging to the economy of our part of Britain as well, and not a spark of electricity would be produced before 2030.

"We need more electricity and we need safe electricity well before then."

Dr Rob Kirby, an independent expert on the Severn Estuary, who has worked on the project for the last 40 years, said the u-turn was down to "environmental fundamentalism".

He added: "It's quite unambiguous - the Cardiff to Weston (barrage) can only benefit the environment and those who say otherwise are not telling the truth."

News of the expected announcement was welcomed by FoE Cymru director Gordon James.

He said: "We have long argued that the Cardiff to Weston-super-Mare Severn barrage would have been too costly in both financial and environmental terms, and that better options exist to harness this important source of clean energy.

"The costs of construction would very likely have risen from the estimated £22bn while it would have caused irreversible damage to wildlife sites that are meant to be protected by law.

"This could have resulted in prolonged legal challenges that would have further delayed a project that would not have delivered the clean energy we so desperately need for over 20 years."

He argued the barrage would have caused balancing problems on the National Grid, by generating a large amount of electricity in two pulses of around four hours each day that would not necessarily have matched demand.

"The Severn estuary is an extremely important source of renewable energy that ought to be harnessed as soon as possible," he added.

"We believe this could be done by other less damaging technologies, such as tidal lagoons, tidal reefs and a shoots barrage, and we hope the government will pursue these better options urgently."