Toshiba will wind up its UK nuclear arm, dealing a potentially fatal blow to plans for a new nuclear power station after a sale efforts to offload the business failed.
NuGen was behind the development of the Moorside project in Cumbria.
Toshiba’s decision will dent the UK’s plans to develop new nuclear power stations.
Unions have criticised the government for failing to intervene and ensure the project went ahead.
The Japanese firm said it would start the wind-up process in January.
“After considering the additional costs entailed in continuing to operate NuGen, Toshiba recognises that the economically rational decision is to withdraw from the UK nuclear power plant construction project, and has resolved to take steps to wind-up NuGen,” the Toshiba statement said.
Korea Electric Power Corporation (Kepco) had been a preferred bidder to take over the nuclear power plant project, but those talks fell through after more than a year of negotiations.
Toshiba said it expected to take a 15bn yen ($131.8m; £100.5m) hit from the withdrawal, but shares in the firm jumped 12.7% in Tokyo.
The GMB union said the “looming collapse” of Moorside had been “depressingly predictable”.
“Relying in this way on foreign companies for our country’s essential energy needs was always irresponsible,” said its national officer Justin Bowden.
“A new nuclear power station in West Cumbria remains vital for the UK’s future energy security and requires urgent action.”
In September NuGen announced it was reducing its team at Moorside from more than 100 to fewer than 40 – leading to speculation the plant’s development was in jeopardy.
NuGen was initially co-owned by Toshiba and the French firm Engie. Toshiba was subsequently forced to buy the remaining 40% of NuGen it did not already own via a bankruptcy condition related to Engie.