The latest difficulties to hit the energy generator throw doubt on the Government’s plans to sell down its 65 per cent stake in the business. Shares in the company plunged 25 per cent to 427p.

British Energy was yesterday operating only one of its eight nuclear stations at full output as the rest struggled with a series of defects and outages. Bill Coley, chief executive, said that the problems, which affect boiler tubes, water pipes and temperature control, were symptoms of an ageing fleet.

The company will now have to buy energy in the open market in order to meet its obligations to customers. The cost is expected to run into hundreds of millions of pounds.

Sources close to British Energy said they now expected the Government’s sell-down to be substantially delayed or dropped. The Department of Trade and Industry (DTI) said: “We will clearly need to take into account the current position at Hinkley Point B and Hunterston B (nuclear stations) when considering any potential share sale.” November baseload electricity prices rose from £43.50p per megawatt hour to £45 and December increased from £ 52.90p to £54 on the news of British Energy’s reduced output. Mr Coley said that the generator could not predict its likely output because some of the stations would work on reduced levels.

The Hunterston and Hinkley reactors have the worst problems, with a total of 146 boiler tubes in need of repair. But there is also significant water leakage at the Hartlepool facility, temperature control problems at Heysham and fuel-routing difficulties at the Dungeness site. The defects jeopardise British Energy’s hopes of extending the life of its reactors. Hunterston and Hinkley are due to be decommissioned in 2011 and a decision on whether their service can be prolonged must be taken by the end of next year. Mr Coley said that it was not yet possible to say whether the current difficulties made the extensions still feasible.

British Energy said there was no threat to safety from the boiler cracks or the water leak. The Government insisted that there would be no threat to the UK’s power supply because of British Energy’s outages. The DTI said that other forms of generation would be brought in by the National Grid.

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