UPDATE 1-Areva quits race for Britain's Horizon nuclear project

* Two separate bids submitted

* Winner to be decided in 3-5 weeks

(Recasts, adds details, background)

LONDON, Oct 3 (Reuters) - France's Areva has dropped out of the race to buy British nuclear new-build project Horizon, a source familiar with the deal said, three months after announcing it was bidding for it with China Guangdong Nuclear Power Holding.

Two other bids have been submitted - one from Areva's competitor Westinghouse and its parent company Toshiba , the other from Japanese engineering firm Hitachi and Canadian counterparty SNC-Lavalin , the industry source said.

"Areva couldn't get a bid together. It's just too much of a stretch for them," said the source, who has direct knowledge of the bids. A winner is expected to be announced in 3-5 weeks, the source added.

The Horizon project was put up for sale by its German owners E.ON and RWE in March, after Germany's decision to pull out of nuclear power blew a hole in the utilities' balance sheets.

The British government plans huge growth in its nuclear industry, with new power stations expected to come on line by 2025 to replace ageing plants. Horizon owns two nuclear sites in Britain where it plans to build 6 gigawatts of nuclear capacity.

Westinghouse had been expected to bid with a Chinese partner, State Nuclear Power Technology Corp (SNPTC), for Horizon.

Areva, Westinghouse and SNPTC declined to comment.

Hitachi and SNC-Lavalin have previous experience of working together on nuclear projects.

Britain's programme to build new plants has encountered various stumbling blocks, with British utility SSE dropping out of new-build consortium NuGen last year and Japan's Fukushima crisis delaying licensing and making projects more costly.

(Reporting by Karolin Schaps; Additional reporting by Stephen Mangan, Michel Rose in Paris and Wan Xu in Beijing; Editing by Pravin Char)

((karolin.schaps@thomsonreuters.com)(+44)(0)(207 542 6622)(Reuters Messaging: karolin.schaps.reuters.com@reuters.net))