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Last Updated: Monday, 16 October 2006, 16:49 GMT 17:49 UK
Leaks knock British Energy shares
Hinkley power station

British Energy shares have lost 24% in value after the firm found cracks in pipes at one of its nuclear reactors.

The cracks in boiler pipes at its Hinkley Point BR3 power station in Somerset were "at the high end of those previously experienced," the firm said.

It is also investigating a "significant leak" in its cooling systems pipes at its power station in Hartlepool.

The news comes a month after the firm found cracks in boiler tubes at its Hunterston BR3 power plant in Scotland.

Shares in the group tumbled after the announcement, ending the day with a loss of 133.5 pence at 427p.

While investors feared the news could spark safety concerns, British Energy said the cracks were not leaking, adding that the problems at the North Eastern power plant were non-nuclear.

Output cut

As a result of the discoveries, the company - the biggest energy producer in the UK - said it would now be carrying out checks at two other plants in the UK.

"The output of Hunterston B R4 and Hinkley B R4 has been lowered," the group said in a statement.

"And preparations are being made to shut down the units for inspections and to undertake any repair work required so as to be satisfied as to the integrity of the boilers," it added.

The news dealt a further blow to the group as the firm warned the new glitches meant it would no longer be able to meet its output targets for the year.

Instead, British Energy said that it would now be forced to buy electricity on wholesale markets in order to meet its supply contracts, adding it was "unsure" how much it would have to purchase.

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