The six national groups planning to build the world's biggest nuclear fusion reactor ended their latest meeting with no agreement on a site for the facility.
ITER - NUCLEAR FUSION PROJECT
Project estimated to cost 10bn euros and will run for 35 years
It will produce the first sustained fusion reactions
Final stage before full prototype of commercial reactor is built
Officials had gathered in Vienna at the International Atomic Energy Agency to discuss the project, which will be based in either France or Japan.
The parties are deadlocked over the decision - and neither Japan nor the EU will back down in favour of the other.
Europe has hinted it could go it alone if the matter is not resolved soon.
The decision to break away could come later this month when European ministers are expected to discuss the issue. The EU would look to other nations outside the Iter consortium to come in and help fund the work at Cadarache in the south of France.
These might include India, Switzerland and Canada, which itself recently withdrew from the Iter process.
But at the end of the Vienna discussions, all talk of a walk-out was being played down.
"The two potential host parties, European Union and Japan, presented the results of recent intensive bilateral discussions on the balance of roles and responsibilities of host and non-host in the joint realisation of Iter in the frame of a six-party international co-operation," a statement issued after the IAEA gathering said.
Iter will be able to produce "star power" plasma (right)
"These discussions will continue in the near future with the aim of aligning the two parties' views.
"All parties were greatly encouraged by the positive atmosphere and expressed their optimism that the process was now proceeding effectively towards a fruitful conclusion among the six parties in the near future."
Japan had been irked by comments in the media at the beginning of the week that suggested it was about to concede. This would not happen, its delegation in Vienna said.
Japan is adamant that its candidate site at Rokkasho-mura in the north of the country is the best - and it has the support of the US and South Korea.
The other two Iter parties, Russia and China, back the Cadarache proposal.
The only way out of the deadlock will be a solution that sees the "loser" get a substantial research-support role for the host.
After the International Space Station, the reactor would be the largest international research and development collaboration.
In terms of the physics and huge amounts of energy involved, the project would be akin to building a star on Earth.
In a fusion reaction, energy is produced when light atoms - the hydrogen isotopes deuterium and tritium - are fused together to form heavier atoms.
This is quite different to nuclear fission in which atomic nuclei are split to release energy.
But to use controlled fusion reactions on Earth, it is necessary to heat a gas to temperatures exceeding 100 million Celsius - many times hotter than the centre of the Sun.
The engineering challenges this presents are immense. Scientists envisage running the reactions suspended in magnetic fields in a torus-shaped chamber called a tokomak.
The rewards, if this can be made to work on the large scale, are extremely attractive.
One kilogram of fusion fuel would produce the same amount of energy as 10,000,000 kg of fossil fuel. What is more, fusion, although it does produce radioactive waste, does not generate the quantities of long-term high-level radiotoxic waste that burdens nuclear fission.