Britain on Tuesday ousted China's nuclear firm CGN from construction of its new Sizewell C nuclear power station, which will now be built with remaining French partner EDF.
The announcement came one day after Prime Minister Rishi Sunak warned that the "golden era" of UK-China relations was "over", adding Beijing posed a "systemic challenge" to UK interests and values.
Rishi Sunak's Conservative government is stripping CGN of its controversial 20-percent stake.
The UK plans to invest £700 million ($843 million) in the project, a figure that was matched by EDF in a 50:50 joint venture.
Sizewell C, which is under development on the Suffolk coast in eastern England, will power the equivalent of about six million homes.
London says it will start producing electricity at the earliest in 2035.
Nuclear and renewables, such as offshore wind power, are seen as critical to ramp up Britain's energy security, after key producer Russia's invasion of Ukraine sent household gas and electricity bills rocketing this year.
The Sizewell decision sparks questions about CGN's role alongside EDF in the construction of Hinkley Point, southwestern England, in Britain's first new nuclear power plant in more than two decades.
"The UK government's investment in Sizewell C will support the project's continued development," the Department for Business, Energy and Industrial Strategy (BEIS) said in a statement on Tuesday.
"The investment also allows for China General Nuclear's exit from the project, including buy-out costs, any tax due and commercial arrangements," it added.
The UK says Sizewell will deliver cleaner energy than fossil fuels and create thousands of jobs for the local area and national economy.
"The government's historic £700 million stake in Sizewell C is positioned at the heart of the new blueprint to Britain's energy sovereignty, as plans to develop the new plant are approved today," the BEIS added.
"This is expected to create 10,000 highly skilled jobs and provide reliable, low-carbon, power to the equivalent of six million homes for over 50 years."
The project represents a "revitalisation" of the UK nuclear industry with the first state backing of a nuclear project in more than three decades, it said.
Tuesday's news also comes after Britain launched an official energy-saving campaign this week to encourage Britons to use less energy in a policy U-turn, as it seeks to curb total energy demand by 15 percent by 2030.
"Today's historic deal giving government backing to Sizewell C's development is crucial to this, moving us towards greater energy independence and away from the risks that a reliance on volatile global energy markets for our supply comes with," added Business and Energy Secretary Grant Shapps.
"This is at the heart of a package of measures that... will ensure secure supply for now, and for generations to come."
The UK has a total of 15 nuclear reactors at eight sites around the country, but many of them are now approaching the end of their lifespan.
Britain is also turning to nuclear energy to help meet its long-running target of net zero carbon emissions by 2050.
The government added on Tuesday that it would establish a new vehicle, Great British Nuclear, that will be tasked with overseeing development of more projects, with a further announcement expected in the new year.
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