British Energy said it remained in talks with potential buyers but remained tight-lipped as to whether it was close to securing a takeover deal with EDF.

Speaking at the company’s annual meeting in Edinburgh yesterday, Sir Adrian Montague, the chairman, said: “Dialogue is continuing and a further announcement will be made in due course”.

He declined further comment on the progress of the talks, which are critical to the Government’s plans for construction of a new generation of nuclear reactors in the UK.

Last month, British Energy said it had received a series of takeover proposals — all of which had undervalued the company.

EDF, the French state-owned electricity giant, is understood the only credible bidder still in discussions about a takeover of the company, whose eight nuclear and one coal plants generate 19 per cent of the UK’s electricity.

EDF wants to build four new nuclear stations in the UK and would use the acquisition of British Energy as a platform to do so, by using existing UK nuclear sites.

But there are signs that British Energy is preparing for an alternative outcome if a deal with EDF falls through.

In recent weeks, the UK group has restarted discussions with other energy companies, including British Gas-owner Centrica and Vatenfall of Sweden. Rather than a takeover, these revolve around the formation of joint ventures or partnerships to build individual new nuclear stations.

Separately, another French company, newly formed GDF Suez said it remained interested in a deal with British Energy but only if the company is broken up and sold as a collection of individual sites.

“If the plan remains to sell British Energy in one go, then it will be sold without us,” Gérard Mestrallet, chief executive of GDF Suez, told Les Echos, the French newspaper, in an interview: “That is not in our plans.”

However, he said GDF Suez remained interested “if one returned to the initial plan, which envisaged a sale of the company site by site.”

British Energy also revealed that the repair programme of its Heysham 2 and Hartlepool reactors was likely to take longer and cost more than originally thought.

Both stations ran into problems last autumn because of wire corrosion in their boiler units.

Sir Adrian told investors said the cost of the repairs would be "significantly higher" than initial estimates of £50 million. It said it would give a further estimate in a trading update on August 13.

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