Riverside Resource Recovery (RRR) and Cory Environmental have proposed the site in Belvedere on the Thames Gateway, which would process approximately 585,000 tonnes of the capital's waste per year.
RRR spokesman Malcolm Chilton said: "We are very pleased that the inspector has recommended that the Riverside Resource Recovery (RRR) project be given the green light."
The planning inspector's decision follows an extensive public inquiry examining the pros and cons of a plant that would take waste from nine London boroughs, collected by Cory Environmental.
The incineration of waste would produce enough electricity to supply 66,000 homes in the capital.
However, despite the planning inspector's support, Trade and Industry Secretary Patricia Hewitt said in a letter accompanying the inquiry's findings that she had yet to decide on whether to give the plant the go-ahead.
Cory Environmental chief executive David Riddle said that London's need for additional waste management facilities was so great that the RRR project required "an urgent decision now," while Chiton said Hewitt's reaction was "disappointing".