Chancellor George Osborne said he is "pretty confident" about plans to build and fund Hinkley Point C nuclear power station despite growing concerns the facility will become a financial white elephant for the UK government.

Osborne told the House of Lords' Economic Affairs Committee that he was confident the government would be able to do a deal to fund the plant but that it was still in negotiations with joint investors EDF Energy and China General Nuclear Corporation and China National Nuclear Corporation on the construction of the project.

French energy company EDF, has already warned that the project will be delayed and will not start generating power in 2023, as previously expected. Controversy has surrounded the awarding of the contact for Hinkley Point with many commentators insisting that the government has agreed to too high a "strike price" – or cost to government per megawatt (MWh). The strike price for Hinkley Point is set at £92.50/MWh and delays will only add to the disquiet surrounding the project.

The House of Lords' Economic Affairs Committee's Lord Turnbull suggested: "It's not 'can we do the deal' but 'should we do the deal. This thing at £92 per kWh is turning out to be incredibly expensive and a huge commitment and for a design which the French can't get to work.

"Shouldn't we really go back to the drawing board, rather than plumping for what I think will be a kind of bottomless pit and a big white elephant?"

The construction of the plant is expected to provide and estimated 900 jobs in the Somerset-based plant over 60 years with around 25,000 ancillary employment opportunities for the surrounding area. Commentators have pointed out that Britain needs to replace an estimated 20% of its ageing nuclear and coal power plants during the decade, but that the speed that this needs to happen has led the government to pay an unprofitable strike price.

The chancellor told the committee that he is to visit China this month to lobby hard on the completion of the deal and is expecting the Chinese president Xi Jinping to visit the UK in October. Hinkley Point is a proposed 3.2GW nuclear power plant with two EPR reactors that will be built for EDF in Somerset. The nuclear power station is expected to meet 7% of Britain's electricity generating needs. It will be built next to the existing nuclear power plants Hinkley Point A and Hinkley Point B.

In readiness for the project and to prepare a potential workforce, EDF has invested £11m in training, education and skills in Somerset opening a new Energy Skills Centre and a Construction Skills Centre in partnership with Bridgwater College. EDF is expected to retain a 45 to 50% stake in Hinkley Point, with China General Nuclear Corporation and China National Nuclear Corporation retaining a combined stake of up to 40%. Other investors will take any remaining share.

Hinkley Point C: a controversial history

November 2005: Prime Minister Tony Blair announces a review into UK energy including the development of new nuclear power stations.

July 2006: Government's energy review agrees to new generation of nuclear power plants.
February 2007: French nuclear energy giant EDF says it hopes to build Britain's first new nuclear power plant in a generation by 2017. In an embarrassment for the government and following court action by Greenpeace it is forced to re-examine plans.

August 2007: EDF Energy and fellow bidder nuclear reactor maker Areva submit their power plant designs.

January 2008: "New nuclear" formally backed by government with plans to complete a nuclear power station by 2020.

September 2008: EDF buys British Energy, owner of Britain's existing nuclear power plants, for £12.5bn to strengthen its candidacy in the race for the "new nuclear" contract.
March 2009: Hinkley Point C in Somerset is flagged as possible site for a new nuclear power station by the Government.

May 2009: British Gas owner Centrica takes 20 per cent stake in EDF's UK nuclear interests.

March 2011: nuclear plant is badly damaged by earthquake and tsunami, leading to a meltdown and explosions. Chris Huhne, the UK's energy secretary, commissions an urgent review into the safety of proposals for new nuclear in the UK.

May 2011: A Government review following the meltdown at Japan's Fukushima Daiichi backs the new nuclear programme, but recommends further safety measures.

October 2011: EDF submits 55,000-page planning application for Hinkley Point to the Planning Inspectorate.

February 2012: Initial preparatory works begin at the Hinkley Point site.
May 2012: Ed Davey, the energy secretary, confirms that talks have begun with EDF over the Hinkley Point deal.

Under Government proposals EDF will be awarded a fixed "strike price", guaranteeing it a certain price for each unit of power.

February 2013: British Gas-owner Centrica pulls out of new nuclear plans, citing delays and increased costs.

October 2013: Government agrees a provisional deal with deal, but receives criticism over spiralling cost that have now reached £16 billion.

The Government agrees EDF should receive a guaranteed strike price of £92.50 – twice the market price of electricity over a 35-year period.

EDF announces plans to retain a 45pc to 50% stake in the Hinkley Point project. Reactor-maker Areva will take 10%, Chinese groups China General Nuclear Corporation and China National Nuclear Corporation will take a combined 35p% to 40% interest, with other parties taking up to 15%.

EDF says that Hinkley will now not produce its first power until 2023, subject to taking a final investment decision in July 2014.

May 2014: EDF begins the second stage of works at the Hinkley Point site including building roundabouts and construction roads.

March 2015: EDF insists Areva taking a 10% stake in Hinkley Point is reactor-maker is "not existential" as the reactor-maker runs into financial difficulties.

September 2015: The chancellor George Osborne has said he remains "pretty confident" about the future of the controversial Hinkley Point C nuclear power station "still in negotiations" with joint investors EDF and China General Nuclear Corporation and China National Nuclear Corporation.