THE construction of Britain's first new nuclear power station for 20 years has come a step closer.

Chancellor George Osborne approved an initial Government guarantee worth £2billion for the proposed plant at Hinkley Point in Somerset.

The announcement came during the chancellor's week-long visit to China, which is supporting construction proposals put forward by French energy company EDF.

Mr Osborne said that new nuclear power was "essential" to ensure the lights stay on as ageing nuclear and coal plants are retired over the coming 10 years.

Hinkley Point C is expected to supply seven per cent of the UK's electricity needs - powering around six million homes - and create thousands of jobs in Somerset and more widely in the nuclear industry across the UK, as well as boosting Britain's energy security, he said.

The new infrastructure guarantee is intended to pave the way for a final investment decision later this year by EDF, supported by China General Nuclear Corporation and China National Nuclear Corporation, with further financial amounts potentially available in the longer term.

The Treasury voiced its hope that Hinkley Point will open the door to "unprecedented" UK-Chinese collaboration on the construction of new nuclear power stations.

"'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," said the chancellor.

"Nuclear power is cost-competitive with other low-carbon technology and is a crucial part of our energy mix, along with new sources of power such as shale gas.

"So I am delighted to announce this guarantee for Hinkley Point today and to be in China to discuss their investments in Britain's nuclear industry.

"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."

Energy Secretary Amber Rudd, who was accompanying the chancellor on his visit to China, described new nuclear power as "a vital part of our long-term plan to provide secure, clean energy supplies that hard-working families and businesses can rely on in the decades ahead".

Ms Rudd added: "Today's guarantee is an important step forward for the first new nuclear power station in a generation and the future of our home-grown energy supplies. We will continue to work with EDF to finalise the Hinkley deal, which will power nearly six million homes and create more than 25,000 jobs - providing more financial security for working people and their families as we transition to a low-carbon future.'

EDF Energy chief executive Vincent de Rivaz said: "The chancellor's approval of the infrastructure guarantee is a clear sign of the Government's commitment to Hinkley Point C. The Government's determination to bring about a renewal of infrastructure and to attract inward investment to the UK are demonstrated by this good news.

"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."

Brian Strutton, national secretary for energy at the GMB union, said: "GMB welcome the statement that the UK needs non-carbon nuclear power to provide base load electricity to keep the lights on when renewables are not generating power for the grid. This underwriting of the financing of Hinkley Point C is welcome.

"However it shouldn't be linked to giving the go ahead for Chinese nuclear technology to be used in a new nuclear power station at Bradwell in return for Chinese funding for Hinkley Point C. If the Chinese government insist on this linkage the UK Government should reject it and allow the Nuclear Decommissioning Authority to provide the funding to enable Hinkley to go ahead.

"Chinese nuclear technology is unproven and no UK government should even consider allowing it to be used in a new nuclear power station 60 miles from London. We have the technology and funding in the UK and MPs must insist that the UK Government goes ahead with that."

Greenpeace UK chief scientist Dr Doug Parr said: "This announcement is a PR smokescreen to give the impression that this project is moving forward when it's actually bogged down in a swamp of troubles.

"Hinkley hasn't got funding or safety clearance, and everyone outside the nuclear industry and our blinkered Government thinks it's absurd, yet the chancellor is ignoring them all to plough ahead with this overpriced, overrated, and overtime project.

"For all his obsession with fiscal responsibility, George Osborne is signing up the country for the ultimate rip-off deal. Instead of locking two generations of UK consumers into paying billions to foreign state-owned firms, Osborne should invest in the flexible, smart, and truly clean energy system that can power a 21st century Britain without leaving a pile of radioactive waste as legacy."