Theresa May delays decision on Hinkley nuclear plant amid concerns over Chinese investment

New British PM Theresa May has postponed making a decision on the controversial Hinkley nuclear power plant, the first new site in 20 years, amid concerns about China's involvement, say reports. A decision from the UK government is expected in the autumn after the board of French-owned EDF agreed to invest in building two reactors at Hinkley Point C in Somerset.

The decision to delay has caused frustration for the China General Nuclear Power Corporation (CGN) who are contributing a third of the money to build the plant. Contracts were expected to be signed by EDF, CGN and the UK on 29 July.

A deal for Chinese investment in the project, encouraged by George Osborne and David Cameron, was signed after a state visit from Chinese premier Xi Jinping in October.

Hinkley is part of a series of linked deals that would see the Chinese invest in a second EDF-led plant at Sizewell in Suffolk, in exchange for a chance to develop Chinese nuclear reactor technology at a site next to the decommissioning Bradwell-on-Sea nuclear plant in Essex.

But plans to build Britain's first new nuclear power station in a generation could be halted as Nick Timothy, May's joint chief of staff, has previously criticised plans for Chinese investment saying it was buying British silence on human rights abuses.

The £18bn (€21.5bn; $24bn) project is scheduled for completion in 2025. The reactors are among the biggest in the world and will provide up to 7 per cent of Britain's electricity needs when they become operational.

But the Telegraph reported that Timothy has suggested that he has concerns that a nuclear deal could enable China to "shut down Britain's energy production at will" if they built weaknesses in computer systems. The newspaper has also noted that May had also raised concerns with Cabinet colleagues over China's proposed involvement.

After EDF approved the deal in Paris with a 10-7 vote one director stepped down from the EDF board. Chairman of CGN, He Yu, had flown to the UK to sign the deals in Somerset at a lavish ceremony – only for May to pull the plug on any announcement.

The decision to delay giving the go ahead to the project was described as "bewildering and bonkers" by the GMB union national secretary for energy Justin Bowden. Supporters of the deal say Hinkley Point C will power 5.8 million homes and create 25,000 jobs.

But opponents warn of possible damage to the environment and the cost of electricity to UK consumers who would pay subsidies to give EDF a guaranteed price for the electricity Hinkley produced for 35 years.

The agreed strike price – a guaranteed price paid to EDF for the electricity generated by Hinkley Point – of £92.50 per megawatt hour is more than twice the cost of existing wholesale electricity prices.