The country’s largest electricity generating company was thrown into turmoil yesterday after it was forced to close two of its nuclear power plants.

Nearly £500 million was wiped from the value of British Energy amid fears that the group will now miss full-year output targets just two months after Bill Coley, the chief executive, insisted that performance was on an “improving trend”.

The move caused a minor panic across power markets, given growing concerns of tight supplies this winter, with day-ahead electricity prices surging by nearly 30 per cent to £58 per megawatt hour.

On Friday, National Grid was forced to ask power companies across the country to increase output for the first time in 18 months.

In a short statement, British Energy said it had discovered a corroded steel wire in the concrete casing of one of two reactors at its Hartlepool power station, which supplies up to 1.5 million homes with electricity.

Both reactors at the site, as well as the two reactors at the similarly designed Heysham-1 power station in the North West of England, will remain closed until further tests can be carried out. British Energy shares plunged by 8 per cent, or 47p to 532p.

British Energy said: “We are currently assessing our return to service dates for these units.

“In determining these dates, British Energy will consider the potential to integrate any additional inspection work arising from our assessment within planned outages over the balance of the year. The company will give a further update in due course.”

Hartlepool and Heysham-1 generate about 17 terawatt hours of electricity a year - 25 per cent of British Energy’s total output. The company accounts for nearly a fifth of the UK’s electricity supply.

Analysts said the worst-case scenario was that both power stations would remain out of action for several months, knocking around 5TWh from British Energy’s production for 2007-2008. The group warned two months ago that its full-year output target of up to 63TWh was already “very challenging”.

It was forced to close its Torness1 power station on the east coast of Scot-land over the weekend because of electrical faults. A British Energy spokesman refused to comment on how long Hartlepool and Heysham-1 would be out of service, but said the group hoped to issue an update next week.

The statement revived memories of last year’s discovery of cracks in the boiler tubes at its Hinkley Point B and Hunterston B power stations.

Both plants are still only operating at only 60 per cent capacity and the group’s recent first quarter profits were down 40 per cent on a year ago.

Mr Coley has been desperate to draw a line under the problems at Hinkley Point and Hunterston and instead talk up the role that British Energy can play in helping to build a new fleet of nuclear power plants.

Analysts said it was too soon to question the management’s credibility, but Cazenove said it expected a “material” impact on the share price. Peter Ather-ton, analyst at Citigroup, added: “Boiler closure units have been a problem for British Energy and it is feasible that it could take several months to remedy the problem. The worst-case scenario is that both stations stay off line all winter.”

Industry figures said that despite tight supplies, there should be more than enough spare capacity across the UK to cope with winter peak demand.

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