British Energy's confirmation that its Heysham and Hartlepool nuclear generators will remain shut down for the foreseeable future has come at just the wrong time for the company. The outages, which could easily take until March next year to fix, will cost the company about 9 Terra watt hours of production, about an eighth of its annual output. This is a company that persistently fails to deliver what it promises, but even pessimistic output expectations of output will be missed because of this development.

More significant than that though, the problems undermine the company just at the time that new nuclear is firmly back on the agenda. This week's Queen's Speech laid out a legislative programme which will facilitate this, even though a decision is yet to be taken formally. British Energy is desperate to position itself as the operator of first choice for the next generation of nuclear power stations. Yet the company's track record in running the plant it has can only deter both investors, potential partners and ministers, who will have the final say on what role BE is allowed to play in developing new nuclear.

True, most of the issues at British Energy are so-called "legacy" problems, arising from years of mismanagement and underinvestment. However, the current management team's reputation is tarnished every time there is an unplanned outage. Analysts expect the latest problems to hit profits for the full year by £114 million, or about 11 per cent. That looks uncomfortable enough but the true cost could be much greater if another operator, such as French group EDF, is favoured when the nuclear bandwagon starts to roll.

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