The potato is genetically modified to produce large amounts of pure amylopectin and is intended for use in technical applications, most notably paper making.
However, BASF state that it has applied for approval as food and feed.
"Potato pulp, or the remains of the potatoes after starch extraction, is commonly used as animal feed.
BASF Plant Science has therefore asked the EU authorities for approval of the genetically optimized starch potato Amflora as food and feed under EU Directive 1829/2003 in March 2005," stated the company.
The EC's approval came about after a stalemate at last week's Council of Ministers meeting, which handed the decision back to the Commission.
"The European Food Safety Authority (EFSA) has repeatedly stated that Amflora is for humans, animals and the environment as safe as any conventional potato," stated BASF.
The company revealed that commercial cultivation would begind in 2008.
However, the anti-GM lobby has reacted strongly against the decision.
Helen Holder, GMO campaigner at Friends of the Earth Europe said: "No new GMOs have been grown in the European Union for 10 years now and research show that GMOs actually stimulate the economy less than green farming measures.
It is time to accept that there is simply no market for genetically modified crops.
"The big GMO companies claim that using genetically modified potatoes in industrial processes is an environmentally-friendly option, but this is absurd considering the associated health and environmental risks." EFSA came up for criticism from Greenpeace.
Marco Contiero policy adviser on GMOs at Greenpeace European Unit said: "The European Food Safety Authority did not investigate the effects of the BASF potato on biodiversity and the ecological implications of its cultivation.
BASF did not supply the EFSA with data on the impact of its genetically engineered potato on the environment.
"Instead, it limited its analysis to the effects of surrounding wildlife on its potato.
This makes a mockery of EU law (1), which requires that all applications for genetically engineered plants must include a full environmental impact assessment."
Europe is already a significant producer of potato starch.
Normal potato starch is valued for its high molecular weight (giving excellent thickening properties) and low levels of fat and protein compared to wheat and cornstarch.
Nearly all starches have two components - a high molecular weight, highly branched molecule with excellent thickening properties, called amylopectin, and a smaller, linear molecule which gels, called amylose.
The 20 per cent amylose in normal potato starch limits its usefulness for many industrial applications.
Separation of the two components is not economic, so most industrial starch is first chemically modified to reduce the gelling tendency.
Amflora is a genetically optimised potato that produces pure amylopectin starch.
BASF said that this breakthrough was achieved by tweaking the pathway by which it is made in the plant cells.
Both amylopectin and amylose are built from the same simple sugar dextrose and the different physical properties come about because of the way the monomers are joined.
The linear chains of amylose are constructed using a single enzyme called GBSS (Granule Bound Starch Synthase).
Scientists have used biotechnology to make a back-to-front copy of the gene (called an anti-sense gene) and then inserted this into the DNA of a conventional potato using a bacterium (Agrobacterium tumefaciens).
The anti-sense gene interferes with the operation of the normal gene, and no GBSS is produced.
In the absence of this enzyme, the polymerisation of dextrose all goes in one direction, to produce amylopectin.