A consultation is launching to seek people’s views on whether beavers should be reintroduced to England’s rivers.
The creatures were once widespread throughout Britain, but were hunted to extinction 400 years ago.
Studies have shown that the return of the mammals could help to restore river habitats.
But the National Farmers’ Union warned that beavers’ dams can cause disruption.
The consultation will last for 12 weeks.
Environment Secretary George Eustice said: “Today marks a significant milestone for the reintroduction of beavers in the wild.
“But we also understand that there are implications for landowners, so we are taking a cautious approach to ensure that all potential impacts are carefully considered.”
The steps towards bringing beavers back to England follows reintroduction programmes in Scotland, which have led to established wild beaver populations. Trials in Wales and England have also been assessing the mammal’s impact on the environment.
A five-year study of beavers that were reintroduced to the River Otter in Devon found that the creatures were beneficial to the environment.
Beavers are often described as eco-engineers – their dams create wetland habitats where wildlife can flourish. The animals transport logs, branches, stones and mud to build the barriers across rivers. The dams help create pools of deep water that deter predators.
The River Otter study found that the natural constructions also act as natural flood barriers, protecting homes downstream.
Eva Bishop, from the Beaver Trust, said a national policy for the animals was an important step.
“We hope to see beavers accepted back in the countryside like any other native wild animal – particularly as they have a role to play in nature’s recovery and British wildlife resilience in the climate emergency,” she said.
However, the River Otter study also concluded that beavers can cause localised problems for some landowners.
And the National Farmers’ Union urged caution over widespread reintroductions, warning that beavers can damage trees and impede drainage from farmland.
NFU spokesman Richard Bramley said: “Where there is a financial impact on a farm business, adequate compensation must be made and an exit strategy must be in place should major issues occur.”
The government has also announced plans to give beavers legal protection in England as a native species.
This makes it an offence to deliberately capture, kill, disturb or injure the mammals, or to damage breeding sites or resting places.