President Sarkozy has put in motion the privatisation of Areva, the world’s biggest builder of nuclear power stations, as he asked officials yesterday to assess plans for a merger with Alstom, the French engineering group. The tie-up would create a Gallic giant valued at €40billion (£27.2 billion), with a global reach in sectors ranging from energy to trains.

The move has set Paris on a collision course with Berlin, which is keen for Siemens, the German engineering group, to maintain a 34 per cent stake in Areva Nuclear Power, the nuclear reactors subsidiary.

HSBC bank and McKinsey, the con-sultants, were reported to have been appointed to advise the French authorities on options for the nuclear group.

The French State controls 87 per cent of Areva, largely through the Atomic Energy Commission. However, Berlin is hostile to what German officials suspect is a French plot to freeze them out, and Angela Merkel, the German Chancellor, made clear her determination for Siemens to retain its stake when she met Mr Sarkozy on Monday.

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