The Government has announced a £10 billion guarantee for the proposed new nuclear power station at Hinkley Point to help get the major project moving.
Ministers have offered the money to French energy giant EDF to help finance the £14 billion construction of the new reactors on the Somerset coast.
EDF has already prepared the site next to the two existing stations, but has insisted it will not commit to the project unless the Government guaranteed a minimum price for the electricity the new reactors will produce.
"Intense" negotiations continue, sources say.
Treasury officials last night insisted the guarantee was a commercial loan, not a subsidy. But the taxpayer will be exposed if the deal turns sour.
Environmentalists oppose the new station, and Greenpeace is threatening legal action.
But proponents say £100 million a year will be invested into the local economy at the peak of the eight-year construction project.
EDF estimates up to 25,000 people will be employed over the course of construction with 5,600 people on site at peak.
Chris Garcia, chief executive of the Heart of the South West Local Enterprise Partnership, charged with driving economic growth in Devon and Somerset, said: "The additional support for Hinkley Point, the biggest engineering project in Europe, is a significant boost to the area.
"It will be fundamental in driving growth and provide a wealth of opportunity for businesses through the supply chain."
Hinkley Point C is significant as it would be one of the first of a planned new generation of UK nuclear power plants.
The site on the Bristol Channel coastline has supplied millions of homes with power since Hinkley Point A became operational in 1965.
Garry Graham, deputy general secretary of the Prospect union, said: "The decision to pre-qualify EDF's Hinkley Point C project for an infrastructure guarantee is a nod in the right direction, but procrastination over the strike price is the real barrier to construction getting under way.
"Agreement on the strike price will provide a platform for the investment needed and inject confidence for those seeking to invest in an industry where the UK has an opportunity to be an international world leader."