Austria has filed a legal challenge at the European Court of Justice against EU-granted state subsidies for a new nuclear power plant in Britain, government officials confirmed yesterday.

"Subsidies are there to support modem technologies that lie in the general interest of all EU member states. This is not the case with nuclear power," Chancellor Werner Faymann said in a statement.

Austria argues that the Hinkley Point C project is in breach of European law and risks distorting the energy market.

The announcement comes just days after an alliance of 10 German and Austrian energy companies also filed a legal challenge at the ECJ against Hinkley Point.

Under the disputed deal, Britain would help fund the construction of two new reactors in southwest England.

As part of the agreement, the British government would guarantee an elevated 35-year fixed electricity rate to French energy group EDF, which would be in charge of the building the plant.