The International Thermonuclear Experimental Reactor (Iter) will be the most expensive joint scientific project after the International Space Station.

The Iter programme was held up for over 18 months as parties tried to broker a deal between the two rivals.

Nuclear fusion taps energy from reactions like those that heat the Sun.

Nuclear fusion is seen as a cleaner approach to power production than nuclear fission and fossil fuels.

Officials from a six-party consortium signed the deal in Moscow on Tuesday, for the reactor's location in the Cadarache site in southern France.

Janez Potocnik, EU commissioner for science and research said that Iter "marks a major step forward in international science cooperation".

He added: "Now that we have reached consensus on the site for Iter, we will make all efforts to finalise the agreement on the project, so that construction can begin as soon as possible."

Rich reward

The European Union, the United States, Russia, Japan, South Korea and China are partners in the project.

Japan earlier withdrew its bid, after a deal was worked out for the "runner-up" to receive a generous concessions package.

According to the package, Japan will get 20% of the project's 200 research posts while providing only 10% of the expenses, and host a related materials research facility - of which half the construction costs will be shouldered by the EU.

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"It is a big success for France, for Europe and for all the partners of Iter," said a statement issued by the office of French President Jacques Chirac.

Prof Sir Chris Llewellyn Smith, director of UK Atomic Energy Authority's (UKAEA) Culham division, which is responsible for the UK's thermonuclear fusion programme, called the decision "wonderful news".

"Rapid construction of Iter will be a major step in the development of fusion as a potential large-scale source of electricity that will not contribute to climate change," he added.

Earthbound star

In terms of the physics and huge amounts of energy involved, the Iter project would be akin to building a star on Earth.

It would be the first fusion device to produce thermal energy at the level of conventional electricity-producing power stations, and would pave the way for the first prototype commercial power station.

In a fusion reaction, energy is produced when light atoms - the hydrogen isotopes deuterium and tritium - are fused together to form heavier atoms.

To use controlled fusion reactions on Earth as an energy source, it is necessary to heat a gas to temperatures exceeding 100 million Celsius - many times hotter than the centre of the Sun.

The technical requirements to do this, which scientists have spent decades developing, are immense. But the rewards, if Iter can be made to work successfully, are extremely attractive.

One kilogram of fusion fuel would produce the same amount of energy as 10,000,000 kg of fossil fuel.