Brussels asked Prague on May 2 to suspend the signing of the multi-billion-dollar deal with Korea Hydro and Nuclear Power (KHNP), which was selected last July to build two nuclear units after beating France's EDF in the tender.

EDF has complained to the Czech antitrust watchdog and filed a lawsuit, prompting a Czech court to block the deal being signed.

The European Union said it was assessing whether KHNP had received "foreign financial contributions" that could have distorted competition.

This could trigger a formal investigation.

The Korean company told AFP that it had responded to Brussels "stressing that the bidding process was transparent" and that it had "not received any subsidies from the Korean government that could distort competition".

"If the European Commission proceeds with an in-depth investigation on foreign subsidies and imposes a provisional ban on the contract, KHNP plans to immediately file for an injunction with the EU Court to suspend the investigation and lift the ban," it said in a statement.

"KHNP is also reviewing all possible legal responses, including requesting special trade measures from the Korean government," it added.

"We are reviewing the matter very seriously," a senior KHNP official told AFP.

The trade ministry in Seoul said Korean companies' projects in the European Union fully complied with World Trade Organization rules and EU regulations, adding that it would review the issue if KHNP made a formal request.

For now, the deal is on hold after a Czech court in early May blocked the contract until a verdict is reached in a lawsuit filed by the French giant.

KHNP was due to build two units at the southern Czech nuclear plant of Dukovany managed by the state-run CEZ group, with the Korean firm offering to build them for around 200 billion Czech koruna ($9 billion) each.

Prague had expected to finalise the deal with KHNP by March this year, but the EDF appeal delayed the process.

CEZ expects construction to begin in 2029 and the first reactor launched in a trial operation in 2036.