The memorandum was signed by US Secretary of State Condoleezza Rice and UAE Foreign Minister Sheikh Abdullah bin Zayed al-Nahyan on 21 April.

It is being seen by the US as a precursor to a wider bilateral agreement, which would set up a legal framework for trade in nuclear technology and fuel, giving US firms such as GE and Westinghouse Electric access to the UAE market.

France was the first nuclear giant to gain a foothold in the UAE after signing a similar deal during President Nicolas Sarkozy’s visit to the country in January. This paved the way for a team of three French companies – Areva, Suez and Total – to announce plans to build a nuclear power plant in Abu Dhabi. “Of course it [the US-UAE memorandum] is creating competition,” says Fleur Floquet-Daubi-geon, a spokeswoman for Areva. “We are not in any kind of industrial discussions with the government of the UAE. Our ambitions remain the same. We have established a partnership, but we have not even presented an offer yet.”

Similar agreements have already been signed by France and Qatar, and the US and Bahrain.

The deal raises more questions over the future of the GCC’s joint nuclear plans.

“We intend to build a nuclear power plant,” says a source at Dubai Electricity & Water Authority. “The UAE is in line with other GCC countries. They have together agreed to do something, but the UAE does it much faster. We are not dependent on each other. We are each taking our own initiatives.”

The latest deal with the US came a day after the release of a UAE government white paper outlining the country’s policy options for a nuclear energy industry.

The document outlines the government’s plans to ratify a series of global treaties on nuclear safety and non-proliferation, work with the International Atomic Energy Agency (IAEA), establish a Nuclear Energy Institute and import enriched uranium.

“In an effort to limit the danger of proliferation, the government of the UAE has also adopted a policy renouncing the development of any domestic enrichment or reprocessing capabilities,” said Foreign Minister Sheikh Abdullah bin Zayed al-Nahyan.

Nuclear energy has been on the emirates’ agenda for more than a year as it struggles to maintain economic growth and energy supply. “We recognise that this growth will require continued access to affordable energy,” said Sheikh Abdullah.