Shares in the company, which has eight deep mines, several open cast mining operations and substantial property interests, rose 8.5 per cent to 136½p, valuing the company at £199 million, on the announcement.

UK Coal, which started out as RJB Mining in 1994 after the privatisation of British Coal, said that it had received the approach several weeks ago but had been unable to get any further information.

In a statement to the London Stock Exchange it said: “The company asked the relevant party for clarification in relation to a number of aspects of the approach. No such clarification has been received to date and indeed there has been no substantive response to the company’s request for clarification.”

Last month UK Coal said that losses had deepened to £51.6 million last year from £1.2 million in 2003 after industrial action and poor operational performance at some of its mines.

Some analysts have speculated that the would-be bidder could be a property company that was interested in UK Coal’s land but which did not appreciate the company’s liabilities for regeneration and its clawback agreements with the Government after the privatisation of British Coal.

Martin Potts, a mining analyst at Durlacher, said: “I think it’s quite possibly a property investor that is having a little look who may not be fully aware of those issues. The underlying coal business is having a horrific time.”

UK Coal was last approached for a takeover five years ago when Renco, a US energy company, discussed a bid but then withdrew.

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