Without mentioning the 18 billion pound (23 billion euros) British project, EDF said on Friday that following a review of long-term financing requirements, its board had decided to issue 4 billion euros worth of shares "by the closure of the 2016 accounts".

In addition, it said it would offer to pay dividends on 2016 and 2017 profits in shares. The government, as the 85 percent majority shareholder, has already accepted to take its dividend for 2015 in shares, saving EDF 1.8 billion euros of cash.

Separately, the government said it would subscribe to 3 billion euros of the planned 4 billion euro capital increase and would also take the scrip dividend options.

In an interview with French daily Le Figaro after the board meeting, EDF Chief Executive Jean-Bernard Levy said the company needed additional financial means for future projects.

He added that while EDF's cash position is healthy, the credit rating agencies downgraded the company last year and may do so again. "EDF is highly in debt and the imbalance between the company's assets and its equity capital is worrying," he said.

The government also said that in order for EDF to finance its new projects it would back a plan to open up the capital of its grid operator unit RTE to outside investors by end June, with a view to completing the sale of shares by end 2016.

The government has already said state-owned bank Caisse des Depots et Consignations could buy half of RTE.

EDF said on Friday the RTE sale is part of a plan to sell 10 billion euros worth of assets by 2020, including thermal power generation plants outside France and companies in which EDF has minority equity stakes.

The company also plans to cut operational expenditures by at least 1 billion in 2019 compared to 2015.

Ahead of the financing plan announcement, EDF put back the final investment decision on Hinkley Point by several weeks to give time to conduct a consultation with its works council.

Two sources close to EDF said Levy had agreed to a works council review, which should delay a final investment decision until after EDF's May 12 shareholders meeting.

A source close to the French economy ministry said the works council procedure could take two to four months.

The source also said the state's EDF stake should remain around 85 percent as the state's partial subscription to the share issue would compensate the dilution of the share dividend.

(1 euro = 0.7791 pounds)

(Editing by Greg Mahlich and Richard Balmforth)

By Geert De Clercq