UPDATE 2-Finland's TVO says Areva ended talks on delayed reactor project

(Adds Areva statement)

HELSINKI, May 26 (Reuters) - French nuclear group Areva has broken off talks with Finnish utility Teollisuuden Voima (TVO) over the delayed Olkiluoto 3 nuclear reactor, TVO said on Thursday.

An Areva-Siemens consortium and TVO are seeking billions of euros from one another over delays and cost overruns on the EPR reactor originally planned to start operating in 2009 but now expected to open in 2018.

“We believed that we were close to solutions, but the French side broke off the talks,” TVO spokeswoman Anna Lehtiranta said.

Areva said it was prepared to resume talks.

“After a prolonged process of constructive negotiations with TVO, we were not able to conclude at this stage,” Areva said in a statement.

“Nevertheless, from our side, the door remains open.”

The dispute is blocking a planned takeover of Areva’s nuclear reactor division by another state-controlled French utility EDF, which does not does not want to take on any Olkiluoto-related liabilities.

The EPR, or European Pressurised Reactor, is a new-generation pressurised water reactor, built to resist the impact of a commercial airline crash. It has been widely criticised as too big and expensive and Areva has been forced to book billions of euros in provisions due to cost overruns.

TVO’s Lehtiranta said the Finnish company was ready to accept a proposed deal whereby the Olkiluoto contract would have been moved outside EDF and Areva would have paid TVO for the delays.

The Finnish company is hitting back at French media reports this week, which said TVO had blocked the contract transfer.

“We are not to blame, we are ready to continue the talks,” Lehtiranta said.

TVO says the reactor delay is a result of insufficient planning and execution by the supplier, while Areva argues that TVO’s inflexibility has been partly to blame.

When the project was launched, its cost was estimated at 3.2 billion euros ($3.6 billion), but in 2012 Areva estimated the overall cost would end up closer to 8.5 billion euros.

TVO’s owners include Finnish paper companies UPM and Stora Enso and utility Fortum.

$1 = 0.8937 euros Reporting by Jussi Rosendahl and Geert De Clercq in Paris; Editing by David Goodman and Mark Potter