Vilnius - Lithuanian Prime Minister Andrius Kubilius welcomed a European Union decision Friday to allocate 175 million euros (240 million dollars) towards laying an undersea "power link" from Sweden to either to Lithuania or Latvia.

"The decision is most welcome as it not only enables us to build an interconnection with Sweden which is important for all Lithuanian energy consumers but also testifies to the feeling of solidarity that the European Union showed again," Kubilius said.

Currently both Lithuania and Latvia have competing claims for the 350-kilometre underwater cable beneath the Baltic Sea.

"Latvia and Lithuania will need to decide first which of two will have the new cable link with Sweden. It would be a shame not to find a solution when we have been granted money at such a difficult time," Kubilius said.

The EU money is conditional on work on the power link starting by 2010, with an estimated completion date of 2016.

Kubilius met with his Latvian counterpart, Valdis Dombrovskis, on Friday to discuss the energy link project.

Dombrovskis agreed in principle with a Lithuanian proposal to establish a joint venture involving Latvia, Lithuania and the third Baltic state, Estonia to move the project forward.

The electricity systems bequeathed to the Baltics by 50 years of Soviet occupation which ended in 1991 have hindered attempts at full energy integration.

A cable from Estonia to Finland called Estlink is the only major connection joining the Baltics to the Nordic grid. (dpa)