A deal between the UK government and French energy giant EDF to build two nuclear plants at Hinkley Point in Somerset could be put under threat by the European Commission as it will open a formal investigation into British government subsidies that breach European competition rules.

The investigation will be launched in the deal which guarantees a minimum power price for 35 years to the power plant’s operators which could distort the market for electricity in the European Union and is examining a string of subsidies tied to the government’s £16bn agreement. The green light for this project was given in October by the energy secretary, Ed Davey, and the Hinkley Point C nuclear power station in Somerset project, was let into the concern of a consortium, led by France’s EDF Energy. Energy secretary Davey agreed to a price of £92.50 for every MWh of energy produced in the near future by the Hinkley Point C nuclear power station, and this price is almost double relative to the cost of electricity. The investigation could last least two months, in some cases could take even more, a move that could lead to long delays and put under threat about 25,000 British jobs. Because it is the first deal of this type that has been put before European regulators, the outcome is unpredictable. However, the British government has set July 2014 as a deadline for a final decision on whether to proceed with the project. The project will be financed by a consortium of companies, including the China General Nuclear Corporation (30-40%), EDF (45-50%) and Areva (10%). Hinkley Point would be the first nuclear power plant to be built in Britain in about two decades. The government has depicted the project as vital to keeping the lights on in Britain and to reducing carbon emissions from electricity generation amid the current aging fleet of nuclear power stations and coal-powered power plants phase out in the next few years.