California has lifted a ban forbidding companies to build huge solar power plants on public lands, the San Jose Mercury News reported on Thursday.

Under a new ordinance by the Bureau of Land Management (BLM), companies planning to build solar plants will be able to file new applications to use federal lands, according to the news paper.

The BLM had imposed a two-year moratorium on new land claims in May, but once that decision became public last week it ignited a controversy with companies fearing it would harm a burgeoning industry hoping to capitalize on the growing need for renewable energy sources.

Executives from the local Ausra and Oakland's BrightSource Energy, which is planning to build solar-thermal power plants in California and elsewhere in the West, suggested the BLM's moratorium might halt progress.

So far, about 125 solar projects requesting rights of way on more than 1 million acres of federal lands have been filed.

Holly Gordon, Ausra's vice president of legislative and regulatory affairs, characterized the BLM's reversal as "welcome news."

Kevin Swartz, president of Newport Beach-based Solel USA, which is building a 550-megawatt solar plant in the Mojave Desert, said the decision "gives developers a greater certainty about future projects."

Solel, Ausra and BrightSource have all signed deals to sell power to Pacific Gas & Electric once their plants are built.