A £450m plan to expand an AstraZeneca vaccine-manufacturing site in Merseyside has suffered a blow after it emerged the government plans to cut some of the funding for the scheme.

It is understood the chancellor, Rachel Reeves, is considering reducing the state aid earmarked for the scheme by more than £20m after her predecessor, Jeremy Hunt, had promised the pharmaceutical company £65m.

The cut is part of a wide-reaching review of all investment decisions taken by the previous administration, the Financial Times reported.

Reeves is looking to cut government spending to plug a £22bn black hole in public finances, which she has said was “covered up” by the Conservative government.

Almost half of the shortfall, £9.4bn, was a result of her decision to fund above-inflation public-sector pay recommendations in full, which reversed years of declining wages and saw off the threat of strikes.

Hunt initially announced plans to provide government support to expand the Speke facility, near Liverpool, as part of his budget in March.

AstraZeneca already runs a facility on the site, which employs 400 people, focusing on childhood vaccinations.

The decision to cut funding by a third would come as a blow to AstraZeneca, whose chief executive, Pascal Soriot – the highest-paid boss in the FTSE 100 – announced last month that it was “absolutely ready to go” with the scheme and hoped the investment could be concluded quickly.

The FT reported that the government decision could even mean the project being relocated to France.

A Treasury spokesperson said: “We are committed to making the UK one of the best places in the world to develop and manufacture new and innovative medicines. The chancellor receives regular updates on this planned investment in Speke, and we are in positive discussions with AstraZeneca to support its delivery.”

AstraZeneca has made a bigger push into the vaccine market in recent years after developing a Covid vaccine in collaboration with the University of Oxford, of which 3bn doses were administered globally.

In May, it withdrew the vaccine from the market owing to a “surplus of available updated vaccines” that target new variants of the virus.

On Tuesday, its stock market value hit £200bn for the first time, after its shares rose by 1%.

AstraZeneca declined to comment.