The chances of a state-owned Chinese company becoming involved in Britain's nuclear programme have moved a step forward with EDF of France signing a new co-operation deal with China Guangdong Nuclear Power Holding Co.

Amid repeated speculation that the Beijing-based CGNP might become an investor in EDF's potential new reactors at Hinkley Point in Somerset, the new deal made specific mention of "co-operation in future international projects".

EDF declined to comment on whether the CGNP could replace Centrica, which withdrew from the Hinkley project in February, saying it needed to complete negotiations with the British government on financial support first.

"We are still in discussions [with the Department of Energy and Climate Change and the Treasury] over contracts for difference and a successful conclusion is the key to looking for new future investors," said an EDF spokesman.

EDF originally hoped to press the button on a new generation of nuclear reactors in Britain before the end of last year but talks with the government have become increasingly fraught with no breakthrough in sight.

The firm has seen the cost of other newbuild projects soar through delays and technical hitches and wants to insulate itself against risks at Hinkley by obtaining commitments from Britain to pay more than £100 a megawatt hour for up to 40 years. The government, which has promised there would be no subsidies for new nuclear power stations, is determined to keep the level well below £100.

Both EDF and the DECC insist the discussions are still moving forward and they remain optimistic that a deal can be done, but privately there are admissions on both sides of the argument that a breakdown of talks would not be disastrous for either.

EDF has its own financial issues to worry about as it is struggling with €40bn (£34bn) of debt. The UK government, meanwhile, is aware that energy security – if not carbon emission targets – might be met more cheaply by gas-fired power stations which can be constructed quicker. The Hinkley Point reactors would cost an estimated £14bn to build.

Any decision by EDF to bring in a Chinese partner would worry some politicians who have raised questions about the security implications of China gaining access to Britain's strategic energy assets.

But a DECC spokesman pointed out that the chancellor, George Osborne, was keen for Beijing to invest in British infrastructure. The spokesman said: "The UK welcomes global investment into the energy sector. Any company operating in this sector will need to meet all necessary safety and security standards."