Vietnam may not have a legal framework to regulate offshore wind farms until next year, a European Union business representative said on Thursday, a delay that could stall billions of dollars of foreign investment in the sector.

Vietnam has big offshore wind power potential given the strong winds and shallow waters near coastal densely populated areas, according to the World Bank Group, which estimates the sector could add at least $50 billion to its economy.

The Southeast Asian country's most recent draft power development plan from December, reviewed by Reuters, targets production of 7 gigawatt from offshore wind by 2030 from zero output now.

Its approval has been repeatedly delayed. It could now be further postponed, Minh Nguyen, vice president of the European chamber of commerce in Vietnam, told a conference on Thursday.

Hinging on its adoption is sizable investment in wind farms, including much of the $15.5 billion pledged by G7 countries in December for green energy transition projects.

Minh said progress depended on new legislation on use of marine space for military, shipping or other purposes, which was not expected before October, citing talks between Vietnamese officials and EU businessmen earlier this week.

That is despite EU companies' pressure for swift regulatory progress, according to public recommendations and an internal document about this week's meetings seen by Reuters.

Some diplomats and experts say Vietnam is also keen to scrutinise Chinese investment in the sector for national security reasons, fearing windfarms could be used for surveillance.

Vietnam's foreign, industry and environment ministries and China's embassy in Vietnam did not immediately respond to separate requests for comment.

A delay would come as little surprise to investors in Vietnam, where bureaucratic and legislative delays are common.

Some are sanguine, however, confident that pilot projects could be approved quickly, even before legislation passes, while others see it as unlikely wind turbine makers would review investment plans given Vietnam's location and clout as a regional manufacturing powerhouse. (Reporting by Francesco Guarascio @fraguarascio; additional reporting by Khanh Vu; Editing by Martin Petty)