UPDATE 2-South Korea shows UK nuclear interest after Toshiba scraps project

* Project was to generate 7 pct of UK electricity

* Could create tens of thousands of jobs

* South Korea still interested in Moorside site

* UK govt says its a "commercial decision" (Updates with unions, government comment)

LONDON, Nov 8 (Reuters) - Japan's Toshiba Corp said on Thursday it would scrap a British nuclear plant project after failing to find an investment partner, but South Korea indicated it was still interested in building a reactor at the site.

The Moorside project in northwest England was expected to provide around 7 percent of Britain's electricity, but faced setbacks after Toshiba's nuclear arm Westinghouse went bankrupt last year.

It was part of Britain's efforts to build a new fleet of nuclear reactors to replace ageing coal and other nuclear plants due to close in the 2020s. New projects have struggled due to high costs and weak electricity prices.

"Whilst NuGen will not be taking the project forward, the Moorside site in Cumbria remains a site designated by government for nuclear new build," NuGen, the Toshiba business in Britain, said in a statement.

"It is now for the Nuclear Decommissioning Authority as the owner of the site and the government to determine its future."

NuGen had been trying to sell its business for 18 months but it is now being liquidated.

South Korea's Korea Electric Power Corp (KEPCO) had been a preferred bidder but lost that status in July as delays to concluding a deal dragged on. South Korea's energy ministry however said it would talk with the British government.

"The ministry plans to closely coordinate with the British government on the Moorside project while monitoring the NuGen liquidation process with KEPCO," Korea's Ministry of Trade, Industry and Energy said in a statement.

KEPCO had said it wanted to use its own nuclear reactor design for the project, which has not been submitted for approval from Britain's nuclear nuclear regulator.

British employment unions Unite and GMB called on the British government to step in to help save the Moorside project which NuGen said would create tens of thousands of direct and indirect jobs in the local area.

The government said all proposed new nuclear projects in Britain are led by private sector developers.

"While the Government has engaged regularly with the companies involved, this is entirely a commercial decision for Toshiba," a spokesperson for Britain's Department of Business, Energy and Industrial Strategy said.

Toshiba had also held talks about selling the project with Canada's Brookfield Asset Management Inc but they also fell through, a source told Reuters last month.

The British government has come under fire for the costs of new nuclear plants, in particular Hinkley Point C in southwest England which is due to come online in 2025 and is being built by France's EDF along with China General Nuclear Power Corp.

It has said it would consider investing directly into the Wylfa Newydd plant in Wales to be built by Japan's Hitachi Ltd in an attempt to keep the costs down. (Reporting by Sabina Zawadzki and Susanna Twidale in London; Jane Chung in Seoul and Makiko Yamazaki in Tokyo Editing by Christian Schmollinger/Keith Weir/Alexander Smith)