TONY BLAIR finally let it be known this week that he wants “Britain” to build new atomic power stations. It was a piquant moment. Belatedly, probably too late, reality had caught up with the chaotic right-on shambles that has been the Government’s energy policy. If new plants are ever built, they will more likely be French, German and privileged than British.

New reactors could replace British Energy’s second generation advanced gas-cooled reactors (AGRs) which are scheduled to leave service in the coming decade. If they are not replaced, Britain will either run out of power or generate a vastly increased amount of carbon dioxide (CO2), the gas accused of global warming. There would anyway be a hiatus between old and new, unless the permitted lives of the doughty AGRs are once more extended.

In reality, no decisions have been taken. Rather, the latest panic over rising gas prices has persuaded Mr Blair that industry’s warnings over energy prices and supply were right all along. A formal review would be needed to reverse the Government’s 2003 Energy White Paper. This crazy document focused on cutting CO2 emissions by backing wind turbines. It noted, without addressing the problem, that the UK would depend on imported gas. Atomic energy, the UK’s only big option for baseload, carbon-free power, was shunned.

By the time a review has reached Mr Blair’s desired conclusion, Britain will probably be incapable of building a new family of nuclear stations the way we want them. The Department of Trade and Industry, egged on by Gordon Brown, is doggedly pursuing the established anti-nuclear strategy.

BNFL, formerly British Nuclear Fuels, is therefore being run down and dismantled. Its key assets, such as Sellafield, have just been transferred to the meaningfully titled Nuclear Decommissioning Authority, leaving BNFL as a contractor.

Things are moving fast. British Nuclear Group (BNG) was set up last year as a separate international company for nuclear services, fuel reprocessing and clean-ups. In summer, BNFL said it would develop BNG itself. By the end of September, directors backed a sale.

Westinghouse, the nuclear company bought by BNFL in 1999, when the plan was to float it as a going concern, is well on the way to being sold. Japanese and American groups are bidding. Having nursed Westinghouse through lean years, the British Government is poised to sell it when the industry is poised for growth.

Westinghouse owns the top modern design of reactor, which can drastically reduce radioactive waste from a new family of power stations. We are about to lose control of it.

Malcolm Wicks, who stopped wrecking the nation’s pensions to become energy minister, still claims that this could make sense. The Government has already ruled out building nuclear power stations itself. Private sector competitors and the EU competition authorities would rule out a state-sponsored nuclear generator even if ministers did not.

Thanks to the same policy mess that has left us with rocketing gas prices this autumn, it is not obvious who would build and operate nuclear stations. Yet without private sector volunteers, the idea that “Britain” will turn back to nuclear would be as crazily theoretical as the 2003 White Paper.

The UK once had three big, well-funded generating companies capable of investing up to £10 billion in new plants: National Power, PowerGen and British Energy, the nuclear specialist. No more. Thanks to narrowly insular policies inherited from the Major Government, regulators forced PowerGen and National Power to sell capacity and shrink. Stuck in this cul de sac, PowerGen eventually sold out to Germany’s E.ON, the second-biggest quoted power utility. The rump of National Power went to RWE, another giant from Germany, where nuclear is still being phased out.

British Energy was the biggest victim of the regulator’s New Electricity Trading Arrangements (NETA) a financial market for electricity designed to bring prices down. He succeeded. With gas prices low, wholesale power dropped 40 per cent. A third or more of the entire power industry effectively became insolvent, an outcome that would be unlikely even in a 1930s style depression.For the most part only the dominant gas-fuelled power stations survived, because the price of electricity reflected their costs. NETA is always likely to work this way, one of the reasons why wind power has to be protected by minimum quotas as well as financial subsidy.

British Energy was baled out by taxpayers and its banks, who are now profiting enormously from NETA’s high prices. It might love to build new nuclear plants. Unless the Government drastically reforms the power market, however, its owners would be mad to repeat the risk.

The same applies to the much larger foreign groups led by Électricité de France (EDF), whose monopoly of France’s nuclear power has made it the biggest quoted utility. EDF has built a market share considered too big for a UK company and has unequalled expertise in running its French reactors. It would not want to undermine its own sales of nuclear power to the UK.

The nuclear lobby itself says that if ministers want new atomic power stations they must provide “appropriate market mechanisms” as well as “addressing the perception of risk” and helping with planning and other pre-construction costs. Under NETA, in plain language, nuclear must be protected and probably subsidised, rather than burdened with carbon taxes aimed at coal and gas. Protection would most easily come in the form of a nuclear quota but that would undermine costlier wind power and narrow the NETA market.

Either way, the British model of energy supply, which Mr Wicks ludicrously tried to foist on unwilling EU counterparts this week, is now doomed.

graham.searjeant@thetimes.co.uk

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive