Britain will guarantee all the loans for the project's construction and grant plant operators a fixed above-market electricity price — roughly double the current wholesale price — for 35 years to ensure their investment will break even.

To gain EU approval, Britain agreed to change some terms, including raising the price for the loan guarantees, which should save British taxpayers 1 billion pounds, the Commission said.

The project is to be carried out by France's EDF energy and a group of Chinese investors who estimate the construction costs to be 16 billion pounds. However, the EU Commission says it will cost 24.5 billion pounds plus another 10 billion pounds for operational costs such as waste management.

When asked about the price difference, EU Competition Commissioner Joaquin Almunia told reporters his service has worked with these numbers in its exchanges with British authorities for a year, and he had no explanation for the lower figures. Queries to EDF remained unanswered.

The few nuclear power plants built in the West over the past decades were all plagued by significant cost overruns. Analysts say building new nuclear power plants isn't economically viable without state subsidies.

The EU decision was controversial as the 28-nation bloc seeks to switch its electricity supply to renewable sources like wind and solar energy. But securing approval for the two Hinkley Point reactors was a top priority for the British government as older plants will go offline in coming years. British Treasury chief George Osborne hailed the EU decision as "excellent news."

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