BRUSSELS, Dec 18 (Reuters) - European Union state aid regulators launched on Wednesday an investigation into proposed British support for a 16-billion pound ($26 billion) nuclear power plant to be built by EDF, saying they had doubts the project needed help.
Britain has offered EDF a price guarantee lasting 35 years on power from a plant which the French utility plans to build in southwest England, but the support mechanism needs state aid approval from the European Commission.
"The Commission has doubts that the project suffers from a genuine market failure," the executive said in a statement, adding it would seek feedback on the case because of its unprecedented nature and scale.
Britain is the first European member state seeking state aid approval for a nuclear support scheme.
If the Commission rules that the mechanism does not comply with EU state aid rules, the project is unlikely to go ahead.
The executive said it will assess whether the nuclear plant can be built without government support.
It will also investigate Britain's plan to back EDF's loans with a state guarantee and the electricity price level agreed in the contract, the Commission said.
EDF has signed preliminary agreements with Chinese investment partners China General Nuclear Corporation (CGN) and China National Nuclear Corporation (CNNC) who will together own 30-40 percent of the project.
French reactor designer Areva will hold a 10 percent stake in the plant.