HINKLEY C took another step closer to reality this week when the Government pledged a £2 billion guarantee to help secure the future of the proposed new nuclear power station.

Chancellor of the Exchequer George Osborne announced the Government guarantee while on a five-day tour of China.

The Government hopes the pledge will pave the way for a final investment decision by energy company EDF Energy and its funding partners the China General Nuclear Corporation and China National Nuclear Corporation later this year.

The Government said more money could potentially be available in the longer term.

The money will come from Infrastructure UK, a unit within the Treasury which works on the UK’s long-term infrastructure priorities and aims to secure private sector investment for them.

Bridgwater and West Somerset MP Ian Liddell-Grainger welcomed the development: “This is exactly what we have been waiting for,” he said.

“It is not only good news for West Somerset but for the region and we can celebrate the efforts made by so many local people.

“We have been working consistently towards this ever since 2008.”

Hinkley C is likely to cost at least £24.5 billion to build and would be Britain’s first new nuclear station for a generation.

The guarantee is designed to encourage commercial lenders to fund the project by pledging money from the taxpayer to repay debts if the developer goes bust.

Mr Osborne said the deal would open the door to unprecedented collaboration between the UK and China on the construction of new nuclear power stations.

He said: “Britain was the home to the very first civil nuclear power stations in the world and I am determined that we now lead the way again.

“It is another move forward for the golden relationship between Britain and China – the world’s oldest civil nuclear power and the world’s fastest growing civil nuclear power.”

The announcement is the latest developments in recent weeks which indicate the long-awaited Hinkley C project is gathering pace.

Earlier this month Mr Osborne said he was confident the scheme would go ahead and last week EDF’s chief executive Vincent de Rivaz said the firm was on the “brink” of making a final investment decision on the multi-billion pound project.

He said the Chancellor’s announcement on Monday of an initial £2 billion guarantee was a clear sign of the Government’s commitment to Hinkley C.

“It is further progress towards a final investment decision on a project which will provide reliable, affordable low carbon electricity for decades.

“We welcome the government’s support for the industrial participation by EDF and its Chinese partners,” Mr de Rivaz said.

Speculation has been growing that a final investment decision could be made in just a matter of weeks, most likely when Chinese President Xi Jinping pays a state visit to the UK in October.

Cllr David Hall, the deputy leader of Somerset County Council said Mr Osborne’s announcement was positive news for both the county and the country.

“This is yet another major milestone for the Hinkley Point C project, which will bring significant benefits to Somerset’s economy, communities and infrastructure.

“The news marks another important step forward and we remain confident Hinkley Point C will go ahead and now await the final investment decision.

“The construction and operation of the plant will bring millions of pounds-worth of investment in our infrastructure and our communities will be set to benefit hugely from the creation of thousands of jobs in Somerset.”

* EDF Energy announced two more preferred bidder contracts worth over £100m yesterday (Thursday).

Rolls-Royce is set to supply heat exchangers for the proposed power station in a contract worth over £25m.

And a Rolls Royce/ Nuvia partnership has been selected for a contract valued over £75m to design, procure, install and commission two systems for the treatment and waste processing of reactor coolant.