Councillors have given the go-ahead for a lake near Abingdon to be filled with waste ash from Didcot Power Station.
Didcot Power Station provides electricity for two million homes
Oxfordshire County Council's planning and regulation committee voted in favour of the move at a meeting on Monday afternoon.
The application will now go to Ruth Kelly MP, secretary of state for local government, for final approval.
If approved, RWE npower will be able to dump the pulverised fuel ash it cannot recycle in one of Radley lakes.
The decision has been met by objections from campaigners who are concerned about the lake's ecological and recreational value, as well as pollution and flooding issues.
David Guyoncourt, vice chairman of Save Radley Lakes, told the BBC News website: "We feel absolutely devastated. There is a group of us who have been working using all our spare time for the last year on this campaign.
"We've written 12 well researched reports which have been presented to Oxfordshire County Council and the Environment Agency and they've been virtually ignored."
Oxfordshire County Council said permission was granted for the proposals on the basis that a search for a better site proved fruitless, and in the future the site will be returned for nature conservation.
John Rainford, from RWE npower, said: "With a secure solution for ash disposal now in place, the power station can continue to provide electricity for two million homes in Southern England, helping to guarantee a secure supply for the coming years."
He added: "We are totally committed to carrying out ash disposal in a responsible way.
"The impact of work upon local residents will be kept to an absolute minimum and local people will be kept informed about all activity."