BERLIN (AFP) – Germany will extend the life of its 17 nuclear reactors by 12 years on average, Environment Minister Norbert Roettgen announced Monday after marathon talks on the controversial issue.

The decision came after 12 hours of talks between senior politicians and forms a key component of the future energy policy of Europe's largest economy.

The lives of older plants will be extended by eight years and those of newer ones by 14 years, Roettgen said, adding that Germany would spend three billion euros annually to develop renewable energy.

Chancellor Angela Merkel's predecessor Gerhard Schroeder had decided to mothball the reactors by around 2020.

Merkel wanted to postpone the shutdown as part of a new "energy concept" for the country due to go before her cabinet on September 28.

The announcement immediately met with mixed reactions.

"We have together found a way to take Germany forward," said Economy Minister Rainer Bruederle.

But the decision was criticised by Greenpeace and other environmental groups as well as Germany's Green Party.

Merkel calls the extension a "bridge" until renewable sources of energy such as wind and solar power can produce more of Germany's power as it seeks to reduce dependence on coal.

A debate has raged in the country and in government over how long to extend and what price to exact from the energy industry, which stands to benefit from the move.

Support for Merkel's coalition has tumbled in recent opinion polls and surveys suggested a majority of Germans opposed the idea of postponing the date that the country goes nuclear-free.

The chancellor, a former environment minister herself, had earlier hinted that her preference was for an extension of 10-15 years, saying this is what is "technically reasonable."

But not everyone in her squabbling coalition agreed.

Roettgen, from Merkel's own conservative Christian Democrats, said he wanted to limit the extension to eight years.

But Bruederle, from the pro-business Free Democrats, Merkel's minority coalition partners, wanted an extension of up to 20 years.

A government-commissioned report last month was meant to bring clarity but with so many variables, not least predicting future electricity and oil prices and demographics, it ended up highly inconclusive.

It did however outline how high the stakes are.

Without nuclear power, the report said, Germany could forget about its target of reducing CO2 emissions by 80 percent in 2050 from 1990 levels.

Environmental pressure group Greenpeace heaped scorn on the report and accused Merkel of yielding to the powerful nuclear energy lobby, a charge echoed by an increasingly confident opposition.

"Ten or 15 years extension. That sounds harmless, but it's not," said Tobias Riedl, Greenpeace's nuclear energy expert, on Friday.

Another item in the mix is a debate over how to make energy companies such as RWE, Vattenfall and E.ON pay for the extension of their plants and ensure a greater contribution to Germany's energy output from renewable sources.

As part of an 80-billion-euro austerity programme for the period 2011 to 2014, Berlin wants to tap energy firms for 2.3 billion euros per year, a quid pro quo for keeping their plants open for longer.

But the utility companies are putting all their considerable lobbying powers into resisting such a levy and the nuclear tax was not in the austerity package the cabinet approved Wednesday.

Merkel has a tricky legal scenario on her hands, as she needs to ensure any draft law would not be subject to approval in the Bundesrat upper house, where she lost her majority earlier this year.