Hinkley Point nuclear power station: Whitehall officials 'exploring ways UK could pull out of deal'

Theresa May's administration called an unexpected halt to the project amid security and viability concerns

Artists impression of Hinkley Point (PA)

Whitehall officials reviewing the massive Hinkley Point nuclear project are exploring how the UK might withdraw from the deal while minimising financial risk and damage to international relations, it has been claimed.

Westminster sources told The Independent civil servants are looking to see if there is any loophole, clause or issue in contracts yet to be signed that allow the Government to pull back without huge loss and while also saving face.

Ministers are acutely aware of the potential damage a withdrawal could do to relations with China, which is committed to pouring billions of pounds into the controversial project.

Former Chancellor George Osborne was an enthusiastic supporter of the £18 billion scheme, but since Theresa May’s arrival it is being reviewed by the new administration.

A Whitehall source said: “There is a working assumption of people in government that the civil service is looking for a way out, a legal loophole, a clause.

“They are looking for anything that will allow the Government to withdraw and also allow the Chinese to withdraw while also saving face.”

It was expected last month when the board of French energy company EDF voted to go ahead with Hinkley C power station that the British Government would give its approval.

Instead new Business Secretary Greg Clark announced he needed more time to make a decision.

It followed claims that the price promised for Hinkley’s electricity at £92.50 per MWh, more than double the wholesale price, was too expensive.

The two new reactors that would be built at Hinkley are also of unproven design, with the two being constructing elsewhere beset by budget overruns and delays.

There have also been concerns over whether China’s involvement is a security risk.

Nick Timothy, a senior adviser to Mrs May previously warned that China “could use their role to build weaknesses into computer systems which will allow them to shut down Britain’s energy production at will.”

China’s ambassador to the UK has warned the delay means the two countries are at a "crucial historical juncture" and that "mutual trust" could be at risk if the deal falls.

EDF may also have problems fulfilling its end of any agreement. The company’s finance director Thomas Piquemal resigned earlier this year, fearing Hinkley could lead to the firm’s insolvency.

A senior Government figure said: “The other thing no-one is talking about is what happens after the French election.

“Hollande is not going to be there and it is not clear whether Sarkozy or Juppe are committed to it.”

A spokesperson from the Department for Business, Energy & Industrial Strategy said: “No contract has been signed and it is only right that a new Government considers all component parts carefully before making a final decision.”