An artificial lake and wetlands covering an area the size of a football stadium are to be created next to the Thames to improve the land and create a haven for plants and wildlife.

Villagers and environmental groups have welcomed the project at Lower Radley, near Abingdon, which is described by the Pond Conservation Trust as "one of the biggest and most forward thinking" private developments in Oxfordshire for years.

Wealthy businessman Ezra Attia has planning permission to hollow out five acres of land, although the permanent water area will be half that size.

Mr Attia - who says he is "mad about wildlife and conservation" - has already built a luxury house on the site of an old boat house.

No details about the cost of the project have been revealed. MAFF will help towards the design costs and the power company Innogy is also expected to contribute, with Mr Azzia picking up the rest of the bill.

Excavated material will be used to return old gravel pits on part of the adjoining land to agricultural use. They have been filled with pulverised fuel ash from Didcot power station.

Mr Attia, who runs a hotel design and development business in London, has been involved in talks with the Pond Conservation Trust, an umbrella organisation for 23 environmental groups, based at Oxford Brookes University.

Richard Snow, the development officer of the Trust, said: "Outside Otmoor, this is one of the biggest wetland creation projects created in Oxfordshire. Over the years, the area will change naturally and we hope it will encourage more species of birds."

The chairman of Radley Parish Council, David Buckle, said: "We are very pleased that this area is to become a sanctuary for wildlife. It ties in with our aspirations for making it a conservation area."

Work is expected to start within the next few weeks.