The newly unveiled plans for a 1.8km tunnel through granite would enable cargo ships and oil tankers to use the Bergen and Alesund harbours without having to sail around the peninsula, which is renowned for its rough seas. Often vessels have to wait offshore for the seas to calm before sailing around the peninsula.
Director general of the Norwegian Coastal Administration (NCA) who is promoting the scheme, Kirsti Slotsvik, told GE: "The seas can remain very rough for long after a storm has passed, and quite a lot of the time ships have to wait out at sea for better conditions.
"With a tunnel there would be easier access to the harbour from both sides of the peninsula. It will also save a lot of time."
The NCA has submitted plans for a £160M tunnel that would be 45m high (including 12m of water) to the Ministry of Fisheries and Coastal Affairs (MFCA).
"We are going back to those plans and rewriting them with a bigger dimensional tunnel," added Slotsvik.
The report argues that the tunnel would pay for itself over a period of time because of the economic benefits it would bring.
The latest tunnel proposal could succeed where others failed because weather conditions around the peninsula may worsen because of climate change, and could potentially double the economic benefit of building it.
Slotsvik said that MFCA will now evaluate the plan and if approved it will be debated in the Norwegian National Assembly in the autumn.
It is hoped that a decision on the tunnel would be made in spring 2009 and would then be added to Norway's 10-year plan for transport, which is set to be reviewed next year. If it is approved, the scheme is estimated to take up to four years to complete.
The geology of the area is well known. Slotsvik said the tunnelling process through the hard granite would be straightforward, as the ground conditions are very consistent. "There are already quite a lot of mines operating in Stad, with rock exported to the Netherlands and Denmark," she said.