Boris Johnson has approved the start of negotiations with EDF about funding a new £20 billion nuclear power plant despite concerns that taxpayers would foot the bill for any extra costs.

The government is considering backing Sizewell C, a twin-reactor plant in Suffolk. It could generate 3.2 gigawatts of electricity, enough to provide 7 per cent of Britain’s energy needs.

The move is a vital part of the prime minister’s pledge to reach net-zero emissions by 2050. Most reactors are due to shut down this decade, leading to fears of blackouts in the 2030s.

China General Nuclear Power (CGN), a Chinese state company, has a 20 per cent stake in Sizewell C but is thought to be planning to pull out, increasing the need for new investors. The government is considering taking an equity stake in the plant amid concerns that private investment could still leave it with multibillion-pound liabilities. Taking an equity stake would allow taxpayers to benefit from any profits.

Sizewell C is now the only project in contention for government investment. The government offered to take a one-third stake in Hitachi’s Wylfa plant on Anglesey, but the Japanese company cancelled it in September.

Sizewell would be a sister project to Hinkley Point C, which EDF, the French energy company, is building in Somerset with CGN. Costs there have risen to £22.5 billion. Alison Downes, of the Stop Sizewell C campaign group, has said previously: “Sizewell C is a bad project — if EDF can’t make it work on their own terms they shouldn’t expect the British public to bail them out.”

Tom Greatrex, of the Nuclear Industry Association, said: “Any credible analysis of reaching net-zero shows you need lots of zero-carbon, including that which is not reliant on the weather.

“Nuclear construction isn’t expensive — financing nuclear projects is. Using a better model than at Hinkley would significantly reduce the cost for consumers.”

The announcement of talks with EDF comes as the government publishes its energy white paper, which includes plans to switch consumers to cheaper tariffs automatically.

Alok Sharma, the business secretary, will publish proposals today to end the “loyalty penalty”, which according to Look After My Bills, a price comparison website, costs loyal customers an average of £169 more a year. Under one plan to be tested, called “opt-in switching”, consumers will be offered a simple method to switch if their initial contract has ended. “Opt-out switching” will involve consumers being automatically moved to a more competitive rate.