Osborne hails nuclear deal with China as a game changer

Chancellor George Osborne (L) visits a nuclear power plant under construction in Taishan, Guangdong province Credit: REUTERS/Bobby Yip

The government has waved the green flag for Chinese firms to help in the development of Britain's next generation of nuclear power.

Chancellor George Osborne also said he would support a Chinese company's move to acquire a stake in the new Hinkley Point nuclear plant in Somerset.

Speaking at Taishan nuclear power station in Southern China, on the final day of his trade mission, Mr Osborne said:

Today is another demonstration of the next big step in the relationship between Britain and China - the world's oldest civil nuclear power and the world's fastest growing civil nuclear power. It is an important potential part of the government's plan for developing the next generation of nuclear power in Britain. It means the potential of more investment and jobs in Britain, and lower long-term energy costs for consumers.

The announcement is the latest example of Chinese involvement in British infrastructure projects, from utilities like Thames Water to large construction projects like the 35-acre site in London's Docklands due to be developed by China's ABP.

Given the sensitivities around nuclear power, the nuclear deal has raised some concerns that it could pose a security threat.

Read: Should we be worried about the Chinese owning our nuclear power stations?

The Chancellor defended the agreement to ITV News' Political Editor Tom Bradby, arguing that it will have economic benefits for Britain:

Energy Secretary Ed Davey called the go ahead for China's involvement in Britain's nuclear power stations "an exciting development".

Mr Davey said it would lead to "strengthening our relationship with China in a way that will benefit both countries."

The memorandum signed by the two nations was also welcomed by the Nuclear Industry Association whose chairman Lord Hutton said it would open "substantial opportunities for UK companies".

Hinkley C in Somerset is due to be the UK's first new nuclear power station since 1995.

French energy giant EDF is the main company behind the project, but has been looking for partners to share the costs.

While any initial Chinese stake in a nuclear power project is likely to be a minority stake, over time stakes in subsequent new power stations could be majority stakes," a statement from the UK Treasury said.