The problem is the update panel is replacing whatever is in it with the script, removing what is there. I haven't tested this, but the following should work:
Markup
<asp:UpdatePanel id="Whatever" runat="server">
<asp:Literal id="Whatever" runat="server" visible="false"
text="<Script>window.open('HtmlReports/HtmlRpt.html','_blank')</Script>" />
</asp:UpdatePanel>
Now, on the click event, just set the Visible propert of the Literal to true and it will render the existing controls and the script.