The only British company in the running to build a new generation of nuclear power plants in the UK has threatened to pull out due to uncertainty over the government’s energy policy, a move that could undermine further talks of a nuclear renaissance.

The Financial Times reports that executives at Centrica, which is planning to build a new nuclear power plant at Hinkley Point in Somerset in a joint venture with EDF Energy, have warned Whitehall that the plan could be scrapped if the company does not receive assurances about the future price of nuclear-generated electricity.

“Nuclear power stations cost £6bn each and we must know what the return is going to be on that kind of investment,” a person close to the company said. “If we don’t get the right answers, we won’t proceed.”

The government has tried to help investors by proposing sweeping reforms of Britain’s electricity market, designed to attract investment in low-carbon electricity generation. As part of that, new nuclear plants will receive a guaranteed price for electricity. But the actual level of support has yet to be determined.

Tim Yeo, chairman of the influential energy select committee, said Centrica’s withdrawal would be a “hammer blow to the future of nuclear,” given that it is one of the few companies with a big enough balance sheet to sustain an investment with little short-term reward.

“If they are considering pulling out I would regard it as very alarming indeed,” he said.

Centrica said the company’s position on nuclear new-build had not changed and it was still working towards taking a final investment decision on Hinkley Point by the end of the year. It added: “There are a number of areas where we still need absolute clarity, such as cost, market framework and planning approval and permits.”

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