Plans to build an £800 million hydro power station in the Highlands have stalled over uncertainty over the financial viability of pumped hydro projects.

Energy firm SSE won approval for the Coire Glas plant at Loch Lochy, north of Fort William, in 2013.

The project could have more than doubled the capacity of pumped hydro in the UK, producing up to 600MW of electricity.

SSE said “a number of commercial and regulatory challenges” will have to be overcome before a final decision is made, which is unlikely to be this year.

The firm previously raised concerns about a lack of clarity over government policy regarding pumped hydro and said the market “needs a minimum level of confidence to invest”.

SNP energy spokesman Callum McCaig said pumped storage schemes like Coire Glas had “an important role to play in the energy mix, particularly with the increasing deployment of renewable technologies”.

He added: “In the four months since the European Union referendum we have not heard anything from the UK Government as to how they will address energy policy; it is clear the inaction from Westminster is putting investment decisions like SSE’s under question.

“The best solution for security of supply, cost to the consumer, and carbon reduction would be for the UK to stay part of the EU’s energy union, but with Theresa May’s government being deathly silent on the issue, it’s impossible to tell if this is even a priority for them.”

Pumped hydro storage schemes involve two linked reservoirs at different heights.

When demand for power is low, water is pumped from the lower loch to the upper loch and stored.

Later, the water is released and allowed to flow back downhill, turning turbines and generating power when demand is high.