The U.K. government is offering ¥2 trillion ($18 billion) in loans and other funding to cover a major portion of Hitachi Ltd.'s project to build nuclear reactors in Wales, a source close to the matter said Thursday.

The proposal is aimed at easing concerns about the swelling costs, which have ballooned to ¥3 trillion. The maker of machinery and infrastructure systems could reach a decision this week on whether to go ahead with the project, the source said.

If it decides to continue, Hitachi is prepared to exchange a document that would serve as a basic agreement with the U.K. government.