The U.K.'s nuclear safety watchdog Tuesday said it has closed the regulatory issue on Areva SA (CEI.FR) and Electricite de France SA's (EDF.FR) proposed EPR nuclear reactor design to be used in new nuclear plants in the U.K., clearing a key hurdle to licensing the reactor.

The U.K. Health and Safety Executive's Nuclear Directorate said EDF and Areva had satisfactorily addressed concerns regarding the digital control and instrumentation, or C&I, system, for the EPR.

"While there are still some outstanding actions to complete, we are satisfied that EDF and Areva have addressed the majority of the key actions associated with the regulatory issue and those that remain now equate to the status of a Regulatory Observation within the generic design process," the Nuclear Directorate said in a statement.

Last year, the Nuclear Directorate placed a regulatory issue, or RI, on the EPR's C&I system over concerns there wasn't a sufficient separation between the systems that control the reactor and those that control the safety systems.

EDF and Areva both welcomed the decision and said it was good news for the EPR.

"Closure of the only regulatory issue, on such a significant topic, is a defining moment for the EPR," said Vincent de Rivaz, chief executive of EDF's U.K. subsidiary EDF Energy.

"This decision by the safety authority, combined with their assertion that there are no showstoppers for the EPR, is a key milestone among EDF's efforts to deliver secure, decarbonized, affordable energy to the timetable the U.K. needs," de Rivaz said.

The Nuclear Directorate is assessing the EPR reactor design as well as Toshiba Corp. (6502.TO) unit Westinghouse Electric Co.'s AP1000, for license for use in the U.K., where EDF is leading the expansion of nuclear power and plans to have its first power plant commercially operational in 2018.

Last week the Nuclear Directorate said it was more likely to issue an interim design acceptance confirmation with outstanding issues than a final DAC at the June 2011 deadline for the process. However, the open issues wouldn't adversely affect companies' declared plans for building new reactors in the U.K. , the Directorate said in its quarterly progress report.

Nuclear power is in the midst of a big revival in the U.K. , where companies have set out plans to build 16 gigawatts of new nuclear capacity over the next 15 years. The government wants to replace its fleet of aging reactors to shore up energy security and reduce carbon emissions from power generation. But the schedule is tight and any delays in the process could create a gap between the time old stations shut and new ones come on line.

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