UK government nuclear policy is under scrutiny as Hitachi, the developer behind the Wylfa Newydd nuclear plant in North Wales, looks set to put the 20-billion-pound ($25.7 billion) scheme on hold.

Hitachi said "no formal decision" had been taken on the Wylfa Newydd project, but acknowledged its suspension was an option amid concerns about rising building costs.

In November, plans to build a nuclear power station at Moorside in Cumbria were halted after Toshiba announced it was winding up its NuGeneration subsidiary, which was behind the project.

The halting of the scheme would represent a major blow to the North Wales economy, with the plant expected to provide 8,500 jobs at the height of its construction.

Once up and running by the mid-2020s it was set to create up to 850 permanent jobs, many of them highly skilled.

It would also serve as a setback to the UK government's drive to move away from the reliance on dirty coal and meet global climate targets.

The 2900 MW plant, which under the proposals would be built on a site next to the former Magnox Wylfa power station, could provide around 6 percent of Britain's energy needs.

The government continues to stress that it is still in talks with Hitachi about Wylfa.

A spokesperson for the Department for Business, Energy and Industrial Strategy (known as BEIS) said it remained the government's objective in the longer term that new nuclear projects, like other energy infrastructure, should be financed by the private sector.

The spokesperson added: "Alongside our discussions with developers, we will be reviewing the viability of a regulated asset base model as a sustainable funding model based on private finance for future projects beyond Wylfa, which could deliver the government's objectives in terms of value for money, fiscal responsibility and decarbonisation."

Carwyn Jones, who holds the economic development portfolio on Anglesey council, said the project held "a once in a generation opportunity" for economic growth for the area. "In terms of the economic development, jobs and opportunities, it's something we are holding out for," he said.

However, Robat Idris, from campaign group People AgainstWylfa B, said: "We have warned for several years that the case doesn't stack up financially.

"It's time to go back to the drawing board. It's time for the local politicians to abandon this ridiculous dream that they've had."

The latest developments are likely to force the government to sweeten future nuclear plant deals for potential investors, in what one expert has called a "desperate leap in the dark".

China General Nuclear Power Group, a company which took a minority investment in Hinkley Point C, is the only other company actively looking to invest in UK nuclear projects.

A Welsh Government spokeswoman said: "This is a major project with potentially significant economic benefits to Anglesey, North Wales and Wales.

"We will continue to monitor the situation very carefully and press the UK Government do to everything it can to help bring this project to Anglesey.

"If the project is scrapped, it will leave the Hinkley Point power station in Somerset as the only new UK reactor still being built.