"This deal is the largest mega-project in Korean history," a statement from the office of Lee Myung-bak, the South Korean president, said.

"It is more than six times bigger than the previous single contract."

Meeting electricity demand

Work on the first nuclear plant is expected to begin in 2012, and all four reactors are due to be completed by 2020.

The UAE, the world's third-largest oil exporter, needs the nuclear power to help meet an expected rise in electricity demand to 40,000 MW in 2020 from around 15,000 MW last year.

South Korea's Lee was present along with Sheikh Khalifa bin Zayed al-Nahayan, his UAE counterpart, to watch the deal being signed.

The South Korean group beat a French consortium and another group led by US giant General Electric.

The Korean bid was $16bn lower than the bid submitted by the French group, an industry source said.

"We were impressed by the Korean consortium's world-class safety and its demonstrated ability to meet the UAE programme goals," Mohamed al-Hammadi, the CEO of the Emirates Nuclear Energy Corporation (ENEC), said in a statement.

Surprise choice

The choice of South Korea surprised some analysts, who had expected the deal to go to one of the other consortiums for strategic reasons.

The UAE's choice must have been based on strictly commercial terms because in terms of political clout in the region it's nil," Al Troner, the president of Houston-based Asia Pacific Energy Consulting, said.

"Korea has a good track record in terms of safety and price and it is a surprise to see the US and France are not part of the bid because they are the ones with the more political strength in the Middle East."

Nascent nuclear programmes in the Middle East, including in Saudi Arabia and Egypt, have fuelled concerns of a regional arms race.

But the UAE has already pledged to import the fuel it needs for reactors - rather than attempting to enrich uranium, the fuel for nuclear power plants - to allay fears about uranium enrichment facilities being used to make weapons-grade material.

The United States earlier this year signed an agreement with the UAE for the country to import, rather than produce, fuel for its nuclear reactors.