The future of nuclear power in the UK hangs in the balance after it emerged that crucial government funding deals could break EU law.
Industry insiders stress that state subsidies, which guarantee financial returns for companies that invest in the technology, are essential to ensure new power stations are built – but energy firm Centrica has reportedly warned proposals to guarantee energy prices could be hampered by EU state aid regulations.
Ministers are taking advice from law firm Slaughter and May on whether planned changes to energy policy would be allowed by Brussels.
An Energy Department spokesman said any moves to assure companies over prices ‘would have to be consistent with state aid rules’.
EDF, which is working with Centrica to build a new reactor at Hinkley Point in Somerset, has already delayed preliminary work at the site until 2013.
The group will make its final investment decision at the end of the year.