The European Union's most senior court has approved British subsidies for a new nuclear power plant, deciding that the proposals are not in breach of the bloc's state aid rules as they rejected an appeal from Austria.

In a case that dates back to 2014, before the UK had left the EU, the European Commission approved government aid for the Hinkley Point C plant in southwest England, which is due to be completed in 2025. It will provide seven percent of Britain's power needs and be the UK's first new nuclear plant in more than two decades.

French energy giant EDF and China General Nuclear Power (CGN) are working together on the $26billion Hinkley plant, which is key to the British government's long-term energy plans. The UK wants to be carbon neutral by 2050 and will embrace nuclear power to help meet the country's electricity needs.

Anti-nuclear Austria challenged the commission's green light and, after losing in the General Court of the EU, appealed to the higher European Court of Justice.

But the ECJ ruled that EU environmental regulations did not automatically bar governments from paying subsidies to build nuclear power plants.

"The Court of Justice confirms the Commission decision approving United Kingdom aid for Hinkley Point C nuclear power station," the ECJ said in a statement.

"A member state is free to determine the conditions for exploiting its energy resources, its choice between different energy sources and the general structure of its energy supply, and which does not preclude that choice from being nuclear energy."

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They added that EU competition enforcers were not required to take into account any negative effects of state aid other than those impacting competition and trade between EU countries.

Austria has long campaigned against nuclear power, bolstered by a referendum in 1978 rejecting atomic energy.

Austrian environment minister Leonore Gewessler called it a "sobering result" and "a regrettable development in Europe which we will take decisive action to counter."

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