Rolls-Royce is leading a consortium that has proposed a £100bn series of “small modular reactor” plants.
Rolls-Royce says the SMR programme would help guard against electricity shortages as older nuclear power stations are decommissioned.
The new technology is expected to offer energy a third cheaper than giant conventional reactors such as Hinkley Point in Somerset.
The consortium says its proposals would create and sustain 40,000 jobs across the UK and contribute £100 billion to the economy. If successful, Rolls-Royce said it could also open up a potential global export market worth up to £400 billion.
Headquartered in Derby, Rolls-Royce and its partners are facing competition from other industry players also keen to work with the Government to develop SMRs – but reports quoting Whitehall sources say the Rolls-Royce-led consortium has emerged as the front-runner.
Derby is the centre of Rolls-Royce's specialist nuclear activities. Around 2,400 people make power plants for nuclear submarines, making it the largest nuclear skills base in the UK.
More jobs could be created if the site is chosen to manufacture components for the fleet of SMR plants.
Last week, union officials who represent Rolls-Royce workers in Derby travelled to Westminster and asked Derbyshire MPs to do all they can to ensure the consortium’s plans get the go-ahead.
Ian Bestwick, convenor for Unite the Union on Raynesway, said: “By my maths, 14 SMR plants will be needed in the UK.
“The sort of plant we’re talking about can fit into roughly the footprint the size of Wembley Stadium. That sounds big, but it’s a lot smaller than the big civil nuclear projects. And it can power a city the size of Derby twice over.”
Harry Holt, president for nuclear at Rolls-Royce, said development of a UK SMR plant promises to be one of the largest national engineering collaborations ever undertaken and Rolls-Royce is ideally placed to champion a British consortium.
Mr Holt said: "The UK has never had a greater need for low-cost, low-carbon, safe, secure and reliable energy production. With demand for energy set to rise in the near future - in part due to the growing popularity of electric cars - we believe that a UK SMR program is a vital addition to our national infrastructure."