DOUBT has been cast on whether EDF Energy will meet its spring deadline to announce a long awaited funding agreement for the Hinkley C nuclear reactor.

There are fears that a legal challenge by the Austrian Government could delay the multibillion pound project for another four years.

Uncertainty could lead to potential investors, including the Chinese, pulling out of plans to build the UK’s first new nuclear reactor in two decades.

EDF has refused to comment on the Austrian challenge, which one top Brussels lawyer claims has a “pretty high” chance of succeeding, but in a statement on its funding plans the French energy giant said: “EDF and the UK Government are working hard to finalise agreements on Hinkley Point C and making significant progress in all areas with the shared objective of finalising all documents by the end of March, 2015.

“EDF is also making progress in its discussions with future project partners.

“Meanwhile, the Hinkley Point C team is working to prepare for the launch of one of the largest construction projects in Europe.”

Austria is challenging the EU’s approval of a £17.6billion subsidy deal for Hinkley which has a total price tag of £24.5billion.

The UK Government claims the reactor will produce 7% of the nation’s electricity by 2023 and provide thousands of jobs for the area, but observers say the legal case could put off potential and existing investors concerned about the financial effects caused by a delay.

Molly Scott Cato, Green MEP for the South-West, welcomed news of the challenge.

“The Greens vowed to support any legal action, so I welcome this announcement by the Austrian Government.

“We simply can’t leave unchallenged the European Commission’s clear breach of its own rules on state aid,” she said.

“This deal would waste vast sums of public money on a dated and dangerous technology when we should instead be promoting a safe and sustainable energy future for Europe.”

The Stop Hinkley Campaign says top energy lawyer Dr Dorte Fouquet, who specialises in competition law, rates Austria’s chances of success as “pretty high.”

Stop Hinkley spokesman Alan Jeffery said: “If Hinkley goes ahead it would be the most expensive project of its kind ever built, yet it isn’t what’s needed.”

A Department of Energy & Climate Change spokesman said: “The UK is confident that the state aid case for Hinkley Point C is legally robust and we vigorously support the European Commis-sion in defence of its decision last year.

“This brings us a step closer to seeing new nuclear as part of our future low carbon energy mix.

“We have no reason to believe that Austria or any other party, is preparing a case which has any merit.”