The Government is concerned that a lack of competition in the UK nuclear industry threatens to distort decision-making in the race to build a new generation of nuclear power plants.

In an interview with The Times, Malcolm Wicks, the Energy Minister, said the Government would look critically at British Energy’s ownership of eight of the most attractive UK sites for new reactors. “We want to see proper competition here,” he said. “We don’t want to see some sort of cagey deal between one company and another company . . . We have got to facilitate proper competition.”

Mr Wicks’s comments come amid rising concern that British Energy, which generates a sixth of Britain’s electricity, could have undue influence over where new plants are built. There is a limited number of UK sites where nuclear plants could be built and local people would be supportive. These include the sites owned by British Energy, a company in which the Government has a near40 per cent stake, and those owned by the Government through the Nuclear Decommissioning Authority. British Energy declined to comment. Although more than a dozen energy companies have expressed interest in participating in the programme, officials are concerned that construction of reactors could be dominated by far fewer players.

British Energy’s chief executive, Bill Coley, said last week that once partnerships to build plants had been agreed, the company would consider altering its corporate structure. This could include the formation of new companies.

Replacing the present fleet of ten nuclear power stations is expected to take decades and cost up to £36 billion.

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