A cross-Channel power cable project has been rejected by the government despite pressure to bolster energy supplies in the face of an unprecedented surge in prices.

Business Secretary Kwasi Kwarteng decided to dismiss Aquind’s plans to provide a new electricity link between Portsmouth and Normandy in France.

The proposal was controversial as a company director, Alexander Temerko, has previously donated more than £1m to the Conservative Party.

Giving the green light to the project could have reignited the sleaze row that has enveloped the government.

The claims have related to MPs’ lobbying, second jobs and the prime minister’s own financial affairs.

A letter published on the Planning Inspectorate website showed Mr Kwarteng had decided to “refuse development consent” having considered his obligations under the energy National Policy Statement.

Berwick-upon-Tweed MP Anne-Marie Trevelyan, now the International Trade Secretary, removed herself from the process in July over funding received by Northumberland Conservatives.

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In 2020, Mr Temerko – a British citizen who was born in the former Soviet Union- told MPs that Russian-linked businessmen have “zero” political influence.

The proposed £1.2bn interconnector had faced stiff opposition in Portsmouth where campaigners had argued against the route, adding that the construction would have led to chaos in a densely-populated City and destroyed landmarks.

Trade minister Penny Mordaunt, the MP for Portsmouth North, celebrated the decision, tweeting “we did it”.

Portsmouth South MP Stephen Morgan, a Labour frontbencher, said: “The government have finally seen sense and stopped the disastrous Aquind project.

“This is a victory for the people of Portsmouth over years of uncertainty and Tory cronyism.”

Interconnectors are cables which help grid operators meet supply and demand for electricity.

Aquind’s case for development was boosted when a fire last September knocked out a UK-France power link at Sellindge in Kent.

It is not expected to be operational again until late 2023 at the earliest.