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German utility RWE AG (RWE.XE), GDF Suez SA (GSZ.FR) of France and Iberdrola SA (IBE.MC) of Spain decided to exit a project for two new blocks of a nuclear power plant in Cernavoda in the south-east of Romania, citing the lack of a clear regulatory framework and uncertainty about the electricity demand growth in the future, RWE said Thursday.

"Economic and market uncertainties for the project, that are mostly related to the effects of the financial crisis, have put the necessary investment into question," RWE said in an emailed statement. "RWE, GDF Suez and Iberdrola have therefore decided to pull out of the Cernavoda project," it added.

The decision to pull also comes as the Romanian state-controlled Nuclearelectrica said it would cut its planned stake to about 20% from the original 51%, a source from GDF Suez added.

Czech Republic's Cez AS (BAACEZ), which was also part of the consortium, had already said last week it was withdrawing.

Italy's Enel SpA (ENEL.MI) and European steel giant ArcelorMittal (MT) haven't withdrawn, but it makes little sense for them to stay in the project alone, the GDF source said.

It is the second time in less than two years RWE has pulled out of a nuclear power plant project in eastern Europe. In 2009, the company pulled out of a similar project in Bulgaria citing financing problems that its local partner, Bulgaria's state-owned National Electricity Co., or NEK, had encountered.

RWE said, however, that it remains interested in participating in the construction of new nuclear reactors in markets outside its home market Germany.

RWE is Europe's largest emitter of carbon dioxide and has said it considers nuclear energy part of its strategy to improve its carbon footprint.

The company is also pursuing new-build nuclear projects in the U.K. in a joint venture with German peer E.ON AG (EOAN.XE).

-By Inti Landauro, Dow Jones Newswires; +33 1 4017 1740; inti.landauro@dowjones.com

(Jan Hromadko contributed to this article.)