Industry Minister Miguel Sebastian said the Garona plant in northern Spain, which had been designed to function only until 2011 and whose operating permit expires on Sunday, would now be allowed to operate until July 2013.

"This was not an easy decision but it is a thought-out decision," he told a news conference, adding the decision would allow for the preservation of jobs in the region at a time of high unemployment.

Socialist Prime Minister Jose Luis Rodriguez Zapatero had vowed during general elections in 2004 and 2008 to gradually phase out nuclear power when the lifespan of the country's six nuclear plants expired.

He pledged the country would focus instead on the development of renewable energy like solar and wind power.

Greenpeace said Garona has been "suffering from severe cracking and corrosion" and the decision to extend its life "means the continued exposure of the population and the environment to an increased risk of a nuclear accident from this dangerous plant."

"Zapatero's failure to live up to his electoral promise is also a big step back in Spain's goal of achieving a sustainable energy model based on 100 percent renewable energy and energy efficiency," Aslihan Tumer, the group's international nuclear campaigner, added in a statement.

Last month Spain's nuclear watchdog recommended that the government renew Garona's licence for another decade, saying the plant could safely operate during that time if certain upkeep works are carried out.

Garona began operating in 1971 in the final years of the right-wing dictatorship of General Franciso Franco and it provides about 1.4 percent of Spain's electricity, according to government figures.

Spain generates around 20 percent of its electricity from nuclear power while in neighbouring France the figure is around 80 percent, the highest proportion of any country in the world.

The country's first nuclear plant in Almonacid de Zorita near Madrid was closed in 2006 and is currently being dismantled.

Earlier Thursday, Zapatero told public radio RNE his government's decision regarding Garona would be "reasonable, reasoned, balanced and responsible" but would be criticised by both sides of the debate over the use of nuclear power.

Support for nuclear energy waned in Europe after the 1986 Chernobyl nuclear power plant accident in Ukraine raised safety concerns over the energy source.

But oil-price volatility and growing concerns over the environmental impact of carbon emissions has led many nations like Britain and Germany to ease their anti-nuclear stance in recent years.

Garona is run by Nuclenor, which is jointly owned by Spain's two biggest utilities, Iberdrola and Endesa.

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