Health advisory body the National Institute for Health and Care Excellence (NICE) said the latest evidence shows women with a low risk of complications are better off being in the comfort of their own home with a midwife present rather than surrounded by doctors in a labour ward.
Professor Mark Baker, clinical practice director at NICE, said: "Research shows that a home birth is generally safer than hospital for pregnant women at low risk of complications who have given birth before.
"Most women are healthy and have straightforward pregnancies and births.
"Over the years evidence has emerged which shows that, for this group of women, giving birth in a midwife-led unit instead of a traditional labour ward is a safe option."
The advice means that 315,000 women a year would be judged safe to give birth at a midwife-led unit or, with a midwife's help, at home. However, first-time births are riskier at home.
Currently, of the 700,000 babies born each year, nine out of 10 babies are delivered in hospital, ultimately under the care of an obstetrician.
Susan Bewley, professor of complex obstetrics at King's College London and part of the team that developed the guidelines, said: "Midwifery-led settings have better outcomes for mothers than the traditional obstetric units and labour wards.
"They may be particularly suitable for all women because the rates of intervention are lower."
It is not entirely clear why there are higher rates of interventions in hospital.
It's thought to be a combination of women being more comfortable in a familiar environment and with midwives they have met before. There's also concern some doctors might be too keen to use clinical interventions.
Professor Bewley stressed the emphasis was on choice.
She added: "There isn't a one-size-fits-all model for all women and that's why a range of settings providing different support for women with different needs gives you better safety overall."
The new advice should save the NHS money as it is more expensive to give birth in hospital than in a specialist birth unit or at home.
And critics say that could force women into giving birth without doctors, against their wishes.
Midwives say its vital women are given the choice of where they have their baby so they can make their own informed decisions.
Cathy Warwick, chief executive of the Royal College of Midwives, said: "I think women are reluctant to give birth out of hospital because they believe hospitals are safest.
"In fact for those who don't have problems during pregnancy - we now know, this isn't true.
"It's very safe in midwifery left units or at home. In fact the outcomes for women are better and outcomes for babies just as good."
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