The Scottish Executive has given the go ahead to world's biggest wave power farm which will be built off the coast of Orkney in a project set to cost £10m.

Initial plans are for four connected wave energy converters with a combined output of three megawatts, enough to power about 3,000 homes.

Scottish Executive Deputy First Minister Nicol Stephen said: "Today marks a vital milestone in Scotland's drive to be a world leader in the development of marine renewables."

The Pelamis machine, named after a type of sea snake, is a 520ft tube consisting of a buoyancy section and a power conversion module. 

Each tube produces 750kW of power and uses wave motion to push hydraulic rams into a central generating unit.

This action pressurises oil in a reservoir which in turn powers the generator. The power is then sent back to shore via a single cable and fed into the National Grid.

Keith Anderson, director of renewables at Scottish Power, said: "The reason people get so excited about the potential of marine [power] is that it is a very predictable and very constant source of energy production."

Wave energy is still in the development stage and needs to be subsidised. But, as with any new technology, the costs will decrease as it becomes more efficient and widespread.