Negotiations between France's struggling nuclear power giant Areva and Finnish operator TVO over cost overruns and delays for the construction of a Finnish reactor have been called off, TVO said on Thursday.

"Our understanding is that we were very close to an agreement over all major issues and principles and then came this somewhat surprising turn that the negotiations were called off," TVO's chief executive Jarmo Tanhua told AFP in an interview.

Areva had no immediate reaction to the remarks.

The dispute is over the liabilities of the Olkiluoto OL3 reactor that Areva and its German partner Siemens have been constructing in Finland since 2005, and which has turned into a major headache for France's beleaguered nuclear industry.

French electricity giant EDF is seeking to acquire a majority stake in Areva's reactor business but does not want exposure to the financial risk associated with the Finnish reactor, originally sold to TVO as a turn-key project.

TVO and Areva have each placed the blame for the cost overruns on the other party, but Tanhua claims his company was ready to make peace with Areva.

Tanhua said TVO had already given its initial consent for its contract to be transferred within Areva to allow the restructuring of the French nuclear industry to proceed, and that there had been a common understanding over the financial compensations as well.

"The indemnities were one thing that had been agreed upon in principle," he said, refusing to disclose any figures.

Parallel to the negotiations, the adversaries have taken the dispute to the International Chamber of Commerce for arbitration, where Areva is claiming damages of 3.5 billion euros ($3.8 billion), and TVO 2.6 billion euros.

"This announcement came from France, that a settlement cannot be found now," he said.

"It makes us wonder if the reasons behind (it) aren't somewhere else than in our negotiations," Tanhua continued.

Olkiluoto 3 is expected to start operations by the end of 2018, nine years behind the original schedule.