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Last Updated: Wednesday, 25 October 2006, 09:48 GMT 10:48 UK
British Nuclear Group up for sale
Inside BNFL mixed oxide plant at Sellafield
Regulators estimate the UK nuclear clean-up could cost 70bn
State-owned British Nuclear Group (BNG) has moved a step closer to private ownership after the government decided it wants to sell it off piecemeal.

The government believes selling the nuclear clean-up business in four parts may raise more than the 400m ($751m) that was offered recently by a US firm.

Trade minister Alistair Darling said he expected the first three parts of the business to be sold next year.

But unions reacted angrily saying the sale was short-sighted.

Unions added that the government had also changed its mind on the matter four times in the past six months.

Originally the government had planned to sell BNG as a complete business. But experts have said that breaking up the company would encourage competition in the UK's nuclear decommissioning sector.

'Best solution'

"It has become increasingly clear that this approach was not the best way of meeting the different needs of BNG's other businesses," Mr Darling said.

"In order to safeguard the interests of the taxpayer and ensure the best solution for the company, its workers and the market in nuclear cleanup, BNG should be split up before being sold off."

The government plans to sell the group off as four separate parts, the management of the Magnox sites, its consultancy business, its 33% stake in the Aldermaston weapons business and the Sellafield clean-up contract, which it will keep for the next two years.

BNG's owner, state-owned British Nuclear Fuels (BNFL), has also given its backing to the break-up plan.

International interest?

Reports suggest that a number of suitors including UK support services firm Serco could table bids for the businesses.

Mark Spelman, a global energy expert at the business consultants Accenture, said he expected a number of international bidders to come forward, particularly from the US and France.

He added that any bidders would have to carry out "due diligence" as the government does not want the taxpayer to foot the bill for any delays or problems with the UK's nuclear clean-up.

In March, the Nuclear Decommissioning Authority estimated that the UK 's nuclear waste clean-up could cost more than 70bn.

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