The French presidency on Wednesday gave its backing to a tie-up between state-owned electricity group EDF and Areva's reactor-building unit, adding that the government would spend "as much as necessary" to recapitalise the troubled nuclear group.
The Elysee said EDF was set to become "a majority shareholder" in Areva's reactor activity, in what could signal a considerable restructuring of the nation's energy sector.
"From now on, the activities of design, project management and marketing of the new EDF and Areva reactors will be brought together in one dedicated company," the statement read.
Once a formidable leader of the world's nuclear energy market offering one-stop-solutions for clients, Areva has been plagued by years of technical problems in its new generation EPR reactors that have generated construction delays, cost over-runs and project cancellation by clients.
The announcement also committed the state to recapitalising the beleaguered nuclear group as much as necessary.
"The challenge isn't merely to respond to financial difficulties that Areva might encounter, but to restructure the entire sector and give it a new outlook," said an official close to President Francois Hollande.
In March, mostly state-owned Areva confirmed record net losses in 2014 of €4.8 billion ($5.3 billion) after it was forced to absorb costs linked to delays, and said it would make savings worth around one billion euros over the next few years.
In May, Areva said it would cut up to 6,000 jobs worldwide as it seeks to slash its costs by a billion euros by 2017.