Britain's nuclear watchdog has hardened its stance against a proposal by U.S.-Japan joint venture GE Hitachi to dispose of UK radioactive waste in a plutonium-burning reactor but has not ended talks.

The Nuclear Decommissioning Authority (NDA), which advises the government on how best to manage the UK's growing plutonium stockpile, is considering a number of options including the fast-reactor design proposed by GE Hitachi in November.

The NDA has repeatedly ruled the multi-billion pound 600 megawatt (MW) reactor out of the running on the grounds that the technology lacks credibility for the purposes of plutonium disposal.

An email from Adrian Simper, the NDA's strategy and technology director, to GE Hitachi on November 29, which was obtained by Reuters, cited as a reason that the market did not expect to deploy them (the plutonium reactor design) commercially for several decades (until 2050).

In that email, Simper also told an unidentified official at GE Hitachi that the NDA wanted to use market-provided reactors because the government was not prepared to take technology risk on a new reactor.

The email also referred to a joint meeting in which NDA set out a hurdle for credibility that GE Hitachi had thus far failed to meet.

Hurdles included the safe management of recycling byproducts as well as finding a British utility willing to own and operate the reactor.

The NDA also demanded financial certainty that costs would be contained to about 2.5 billion pounds ($3.9 billion) and that the government would be insulated from technology deployment risks.

The correspondence concluded with an admission that the two parties have struggled to reach a clear agreement on the work necessary to demonstrate credibility, on which further progress depends.

Talks between GE Hitachi and NDA are expected to continue for several more months, an NDA spokesman said.

The front-runner proposal for converting the UK stockpile of waste plutonium - the biggest civilian stash in the world - involves making it into a mixed-oxide fuel for reuse in a new generation of thermal light water reactors.

The government said in December it preferred this option.

(Editing by Jane Baird)