A spat between the European Union (EU) and Japan over where to locate the International Thermonuclear Experimental Reactor (Iter) research project is threatening to derail the latest moves at development of the technology.

Iter is intended to be the first large-scale demonstration of nuclear fusion. However, with a budget of around $10 billion, significant numbers of jobs are at a stake and although the EU is the largest single financial contributor it has failed to secure an agreement to site the project at Cadarache in France. Japan wants the project to be built in Rokkasho in northern Japan, and the remaining partners are evenly split between the two camps.

Despite efforts by the US to resolve the dispute both sides are refusing to back down with the EU suggesting it may go it alone in the development and Tokyo reacting to the suggestion with its own determined stance. EU ministers have reportedly set a de facto deadline of 18 April to settle the dispute while EU Research Minister Francois Biltgen of Luxembourg has reportedly warned that an agreement has to be reached by the end of June, when the country’s tenure of the rotating EU presidency ends.

Iter is due to start operating in 2014 and run for about 20 years, but the project has already been delayed and without a political breakthrough, it might be stalled indefinitely.