The Government has given its tacit backing to a substantial increase in the share of UK electricity generated from nuclear power to 30 per cent or more.

Senior officials in the power industry have told The Times that John Hutton, the Secretary of State for Business, Enterprise and Regulatory Reform, has expressed support privately for an increase in electricity generation through nuclear power from 18 per cent of the present mix to “30 or 35 per cent” in the long term.

The increase would support the Government's aims of cutting emissions of carbon dioxide by 20 per cent by 2020 and reducing Britain's dependence on imported oil and gas from volatile countries, such as Russia and Iran.

The Government believes that nuclear and renewable power together could supply the bulk of Britain's electricity demands, with the remainder accounted for by gas, clean coal and oil-fired plants.

Publicly, the Government has insisted that it is for the market to decide how many new reactors will be built. A spokesman for the Department for Business, Enterprise and Regulatory Reform said: “If that is what the market does and there is strong interest in new nuclear, then we have no upper or lower limit. We have always said that we are not going to set a limit on it.”

He pointed out that Britain's share of nuclear generation was around 30 per cent in the mid-1990s but it had declined steadily after older reactors were retired from service. With more plants to be decommissioned over the next few years, the proportion is set to drop to 6 per cent by 2020 if no new ones are built. In January, Malcom Wicks, the Energy Minister, said that the Government aimed to phase out all carbon-emitting forms of electricity generation by 2050.

Because the latest generation of nuclear reactors are far more powerful than existing ones - most of which were built in the 1960s and 1970s - such an increase probably could be achieved by building new plants on existing nuclear sites.

A report published today by the Economic Research Council has criticised the Government's handling of the building programme unveiled in January. It says that much greater incentives must be offered to encourage the construction of new plants.

“Only probably three European utilities - EDF, E.ON and RWE - have the financial strength and the inclination to take on the risk of building new nuclear power stations and the Government may have to negotiate directly with them,” the report says. “Sadly, after ten years, Britain is still faced with a Government that appears to believe that White Papers, rather than private sector companies, build nuclear plants ... Until they acknowledge that these companies must be lured by the prospect of earning attractive returns, it is highly unlikely that new nuclear-build in the UK will materialise.”

The report argues that the Government might need to force electricity suppliers to sign up to long-term obligations and to issue Network Rail-style financial indemnities for the accruing debt.

Times Recommends

• Equitable Life halts £7bn sale on market turmoil
• Potential buyers emerge to save Woolworths staff
• Terrorist attacks close Bombay Stock Exchange