British Energy's site at Bradwell in Essex - close to London, Britain's biggest single market for electricity, with plenty of space and good connections to the National Grid - is one of the most attractive locations to build a new nuclear reactor in the UK. It is little surprise, then, that potential bidders for the company are wary of the prospect of being forced to surrender access to rivals.

The Government, however, is desperate to ensure that there is proper competition in the race to build a new series of nuclear plants in the UK. To minimise the risks associated with a programme that is of huge strategic importance and is likely to take decades and cost tens of billions of pounds to complete, it wants at least two leading companies to be involved, using different technologies.

The issue has emerged as a key stumbling block in the auction of British Energy, the UK's biggest electricity generator, which is set to be the centrepiece of the drive to build new reactors in Britain through its ownership of most of the best sites.

Existing nuclear plants are thought to be the only viable locations for new reactors because they have supportive communities. British Energy's other preferred sites include Sizewell, Suffolk, Hinkley Point, Somerset, and Dungeness, Kent. The only alternative is sites owned by the Government through the Nuclear Decommissioning Authority. They are considered less interesting because they are further from areas of high electricity demand.

Yet there has been great interest in these sites, which include Wylfa, on Anglesey, Oldbury, in Gloucestershire, and Sellafield, West Cumbria. Some utilities have even begun to buy land around the sites to ensure that they will have enough space to build giant new reactors. EDF, of France, has been buying farmland near the site at Wylfa.

Buying the Government's 35 per cent British Energy stake would trigger an offer for the group as a whole. It was privatised in 1996 but was rescued from collapse by the Government in 2002 amid plunging power prices.

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