WASHINGTON (Reuters) - U.S. regulators this week told a nuclear power company founded by Bill Gates that its planned construction permit application for a high-tech reactor needs more work, an issue that a critic of the technology said could delay development of the plant in Wyoming.

TerraPower LLC, is trying to build the $4 billion Natrium reactor in Wyoming on the site of an old coal plant. The permit application is expected this month.

So-called advanced nuclear reactors like Natrium that use new materials and fuel types are supported by the administration of President Joe Biden as a potential way to fight climate change. The U.S. Department of Energy has authorized up to $2 billion of taxpayer money for the Natrium project.

The U.S. Nuclear Regulatory Commission on March 19 sent TerraPower a 40-page overview of a "pre-application readiness assessment" of safety and environmental issues for the reactor. TerraPower had asked NRC for the assessment ahead of its construction permit application.

The NRC told TerraPower that the company made several references to technical and licensing reports that its staff has not yet reviewed or that are currently under review.

"References to reports for which the reviews have not yet been completed represents a potential (construction permit) application review schedule risk," the NRC said in the letter.

"The NRC review shows that the Natrium construction permit application is simply not ready for prime time," said Edwin Lyman, a physicist and nuclear power safety advocate at the Union of Concerned Scientists nonprofit group.

"TerraPower should take the time to produce a complete, high-quality application. Otherwise, the Wyoming project is likely to encounter costly delays," Lyman said.

A TerraPower spokesperson said the readiness assessment was a tool to evaluate the completeness of its forthcoming construction permit application and that its timeline is on track.

"TerraPower will be the first company to submit a commercial advanced nuclear power reactor to the NRC and we feel confident in our timeline to submit this application to the NRC this month," they said.

The spokesperson added that "the NRC states in the letter their confidence that TerraPower can supply additional information where needed in the official construction permit application."

The review questions how TerraPower will demonstrate that the materials used to construct the plant will survive harsh conditions over its operating life, Lyman said.

The reactor will be cooled with liquid sodium, instead of water used by today's reactors.

TerraPower in late 2022 delayed Natrium's launch date by at least two years to 2030 due to a lack of special fuel called high assay low enriched uranium, or HALEU. Russia has been the only supplier of HALEU, but TerraPower and Centrus Energy Corp ( LEU ) are trying to establish commercial production capabilities for the 2030 start.