Developers wanting to build a controversial waste incinerator in Sinfin Lane in Derby have been granted a permit by the Environment Agency.
Resource Recovery Solutions (RRS) put forward the scheme to handle un-recycled household waste.
The go-ahead depends on the outcome of a planning inquiry due next week.
Opponents said they were disappointed a permit had been issued before the decision, but the Environment Agency's Mike Haslam said they had to go ahead.
He said: "They're completely separate processes. The company who wants to operate the site has got to receive both consents... they're not dependent on one another.
"We've got a duty to make a decision as soon as we're in a position to do so.
"So if somebody applies to us to operate a plant we've got a legal duty to determine that application and do it as quickly as we can.
"And this is just the timing of it - we've now reached that decision and it wasn't justifiable for us to delay it any longer."
The proposed plant will accept up to 200,000 tonnes of waste per year from Derby City and Derbyshire.
It would slowly heat material to release gas, which would then be burned to create electricity.
The proposals for the plant were rejected in December over health and environmental fears.
RRS appealed against the Derby City Council decision, prompting a public inquiry.
More than 300 residents had objected to the proposals, raising concerns about health and environmental problems, and arguing for a greater focus on recycling.