Nuclear clean-up costs soar

The admission comes as the government unveils a new public body to take over the financial burden of the clean-up programme, currently estimated at nearly £48bn.

That figure is about £6bn higher than previous estimates - and officials admit the cost could increase further as more work is uncovered.

Environmental groups have accused ministers of punishing taxpayers for past mismanagement.

'Cost effective'

Friends of the Earth is calling for a National Audit Office inquiry into the handling of the nuclear industry by the Department of Trade and Industry.

In a White Paper published on Thursday, the government unveiled plans for a new authority, the Liabilities Management Authority (LMA), to take over the cost of dealing safely with the legacy of the UK's early civil nuclear programme.

Under the new arrangements, the Sellafield nuclear reprocessing complex and other ageing facilities will be transferred to the LMA from British Nuclear Fuels Limited (BNFL), which will operate the sites under contract.

The move is designed to free BNFL up for part-privatisation in two years.

The LMA's remit will be to ensure that the clean up is carried out "safely, securely, cost effectively and in ways which will protect the environment".

Effectively bankrupt

Energy minister Brian Wilson said: "The LMA will have strategic management control of clean-up across the UK, based on high safety, security and environmental standards, while maximising value for money for the taxpayer."

The huge liabilities of cleaning up the radioactive waste which has accumulated over 50 years has left BNFL effectively bankrupt, it emerged last year.

The proposals unveiled on Thursday mean that, free of most of its liabilities, BNFL can concentrate on its business operations: nuclear fuel manufacture, fuel reprocessing, clean-up and Magnox generation.

The government had hoped to raise up to £1.5bn by selling off up to 49% of the company.

BNFL is one of the world's biggest suppliers of nuclear services and has an annual turnover of about £2bn.

Nearly half of this comes from fuel manufacture and reactor servicing, which have emerged unscathed from the safety expectations.

Public responsibility

About one-quarter of the company's work involves the operation of Magnox nuclear power stations in the UK.

The government denies accusations by environmental groups that the taxpayer will pay the price for past mistakes in the running of BNFL.

Ministers say nuclear clean-up has always been a public responsibility.

And they say the change will give the taxpayer better value for money by opening it up to competition.