The government's supreme council for energy met on Sunday for the first time in 18 years to discuss alternative energy options.
"The meeting decided to immediately begin studying a nuclear alternative in the light of increased need in Egypt," Magdi Radi, a cabinet spokesman, told MENA, the official news agency.
"The rate of consumption has surpassed the rate of development, and alternatives from other energy sources... are limited while the nuclear option has spread in the world as a result of an increase in safety," Radi said.
The Egyptian minister of electricity, Hassan Yunes, separately told Al-Ahram, a state-owned newspaper, that the country could have an operational power plant within 10 years if the project is approved.
Egypt will build a 1,000-megawatt nuclear power plant at al-Dabaa on the Mediterranean coast at a cost of between 1.5 and two billion dollars, Yunes told the daily.
Ahmed al-Qadi, former chairman of Egypt's nuclear security center, said that the al-Dabaa reactor could produce more electricity than the Aswan High Dam.
Egypt's nuclear programme was frozen in 1986 following the Chernobyl nuclear disaster in what was then the Soviet Union.
On Thursday, the president, Hosni Mubarak, told delegates at the closing session of his annual party conference that Egypt needed to begin developing nuclear energy.
"We must benefit from sources of new and renewable energy, including peaceful uses of nuclear energy," he said.
"The future of energy is a central element in the building of the nation's own future," Mubarak said.
US support for plan
On Thursday, Francis J. Ricciardone, the US ambassador to Egypt, said that the United States would have no objection to Egypt's peaceful use of nuclear energy.
Speaking to Egypt's al-Mehwar television, Ricciardone said that "the United States encourages the peaceful use of nuclear power for civilian purposes throughout the world".
The US has objected to the Iranian nuclear programme by arguing that it will be used to illegally build atomic weapons.