FOREIGN utility groups have approached Centrica, the parent company of British Gas, about a possible £10 billion-plus joint bid for British Energy.

A clutch of continental power companies - led by France’s EDF and Germany’s RWE, and including Suez and Iberdrola - are vying to take control of BE, which operates all Britain’s nuclear power stations.

Centrica was keen to bid in its own right but - as The Sunday Times revealed a fortnight ago - has been held back by a lack of financial firepower and declining share price. The group is now being courted by the continentals. One source said: “It holds the British card and all the bidders know how important that is.” Centrica’s involvement would also water down criticisms of strategic industries going to foreign owners.

It is understood that both Roger Carr, Centrica’s chairman, and Sam Laidlaw, his chief executive, have approached the government to see if it would give preferential treatment to a British bidder. But the government, which indirectly controls a 35% stake in BE, is determined to make this an open contest. The UK group could either become a full participant or strike an agreement to buy power from the new plants.

BE’s future could be resolved within the next few months. Having been forced to seek a government bail-out six years ago, when it was squeezed by a drastic drop in electricity prices, it has since enjoyed a revival.

The nuclear company is a key player in the government’s plans for a new series of nuclear stations. BE began talks with prospective partners for a construction programme last year, but these have quickly escalated. A fortnight ago BE said it was “in discussions with interested parties in the context of its future . . . these discussions could lead to a business combination or an offer for the company”.

BE is being advised by NM Rothschild. The government has recruited UBS. Sources say the leading bidder is EDF. RWE has appointed Deutsche Bank as adviser.

Energy analysts say tension may emerge between the government and other shareholders. One said: “The government wants a good price but its main objective is securing the right company to build nuclear capacity. The other shareholders only want the highest price.”

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