PARIS, Dec 7 (Reuters) - French energy markets regulator CRE is withholding approval for a planned second power link between France and Britain to assess the impact of Brexit on the project, it said on Wednesday.
CRE said it approved RTE's 1.525 billion euros ($1.6 billion) budget for 2017 investments, compared with 1.549 billion approved for 2016, including some initial spending related to the 1,000 megawatt (MW) power link with Britain.
But it said it would launch a public consultation on legal issues raised by Britain's vote to leave the European Union.
"The approval of the IFA 2 project will be the subject of a specific decision in January 2017," CRE said.
RTE is developing the Interconnexion France-Angleterre project, estimated to cost 740 million euros, with Britain's National Grid.
The link is expected to be completed by 2020, and will become the second power link between Britain and France aimed at increasing power transmission capacity between the two after the 2,000 MW IFA high voltage link that was commissioned in 1986.
The regulator said the project was started with the hypothesis that Britain would remain a member of the EU, but the Brexit vote had created some uncertainties.
It said depending on how Britain leaves the bloc, some new treaties would have to be negotiated to govern future relations.
"Nothing today sheds any light on what these potential new treaties may contain, notably on the United Kingdom's access to the internal market, including the electricity market," CRE said.
"This situation is unprecedented and creates uncertainties, particularly with regard to rules around electricity interconnections and, more generally, access to the EU internal electricity market."
The British government has accepted the opposition Labour Party's call for it to set out its plan for leaving the European Union before formal talks begin, but has asked parliament to respect its Brexit timetable. ($1 = 0.9338 euros) (Reporting by Bate Felix; Editing by Ruth Pitchford)