A government demand that any buyer of British Energy must sell at least one of the company's nuclear sites has emerged as a key stumbling block in its sale, The Times has learnt.

British Energy's sites at Bradwell, in Essex, and Dungeness, Kent, are viewed as the most likely candidates.

The news came as hopes of a takeover battle were evaporating last night after it emerged that EDF, of France, was the only company to have tabled a firm offer ahead of a deadline for preliminary bids yesterday.

EDF, led by its advisers Merrill Lynch, submitted a low offer, believed to be abound 650p per share, valuing the group, which generates one fifth of Britain's electricity, at around £6.72billion, sources said.

RWE and Iberdrola, the German and Spanish utilities, are understood to have held back, although they have not ruled out the possibility of tabling a bid at a later date.

Centrica, the owner of British Gas, did not bid, although it remains in talks with EDF about a possible deal to ensure access to sites or power generation assets at a later date.

The Government, which is concerned that no single company should have a monopoly over new nuclear in the UK, is insisting that a guarantee of access to some of British Energy's nine sites should be a condition of the sale of its 35 per cent stake in the company. If necessary, it could also include legislation in the forthcoming Energy Bill that would force a buyer to sell them or guarantee access to rivals.

They could be made available independently or as part of a package of other sites owned by the Government through the Nuclear Decommissioning Authority (NDA).

Bradwell is viewed as the most likely site to be split off because it includes tranches of land owned by both British Energy and the NDA. Bradwell hosted an operational reactor from 1962 to 2002, which is now being decommissioned.

British Energy bought land adjacent to the power station ten years ago with the intention of building a gas-fired plant, which was not built. Last November, it secured an agreement with National Grid to build a new transmission link to the site.

The auction of British Energy, which operates eight nuclear reactors and one coal-fired power station, has been beset with problems since The Times first reported in February that the board was considering a possible break-up, or sale.

The company's biggest reactor, at Torness in Scotland, broke down mid-way through the due diligence stage, undermining confidence in the group's fleet of ageing reactors.

Another potential bidder, Vattenfall, of Sweden, dropped out in the final stages after pressure from the Swedish Government. E.ON, of Germany, also dropped out, although the company remains interested in developing new nuclear plants in the UK.

Yesterday a spokeswoman for British Energy sought to play down the significance of the auction process, which is being handled by Rothschild, the investment bank. She insisted that there had never been a firm deadline for bids and said there was no guarantee the Government would decide to sell its stake.

The lack of bid interest could create problems for the Government, which is eager to use the sale of its holding as an opportunity to kickstart the new reactor programme.

Both the Government and EDF declined to comment.

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