The European Commission has launched a formal investigation to check that the deal struck over the financing of the UK’s new nuclear power stations does not contravene “state aid” regulations.

The Government has agreed a deal which will guarantee the price of electricity from the planned £16billion Hinkley Point C plant in Somerset at £92.50 per kilowatt hour over a period of 35 years.

It is understood preliminary agreement was also reached with EDF Energy for a guaranteed price of £89.50 per kilowatt hour over a similar period for electricity from the proposed Sizewell C.

However, the EC must now check that the deal does not contravene state aid regulations which prohibit individual governments from giving an unfair advantage to companies competing in the European market.

Officials have to be convinced that the proposed nuclear power plants need Government help and, if they do, whether the financial deal meets state aid regulations.

The UK is the first European member state seeking state aid approval for a nuclear support scheme. If the European Commission rules that the scheme does not comply with EU state aid regulations, neither Hinkley Point C nor Sizewell C are likely to go ahead.

EDF Energy said it was right that the EC should examine the contract and it looked forward to engaging fully with interested parties.

“This investigation gives the Government and others the opportunity to show that electricity market reform in the UK is essential to deliver the investment needed for the country’s low carbon energy future at a price that is fair for customers,” the company said.

“Without this reform, the investment will not take place.”