EDF has rejected claims that it risked overpaying for British Energy after the UK nuclear generator reported a 50 per cent decline in first-half profits and another big rise in the repair bill for its fleet of ageing reactors.

EDF, the French state-controlled energy company, agreed in September to buy British Energy for £12.5 billion. The deal has yet to be approved by European regulators.

British Energy blamed its disappointing figures on power station shutdowns, a continuing maintenance programme and lower electricity output from its eight nuclear plants and one coal-fired power station.

It said that the cost of repairing corroded wires and cooling systems at its Hartlepool and Heysham I nuclear stations, which have been closed for more than a year, was set to rise to at least £125 million in this financial year, far more than the estimate of £50 million made in January.

It also said that the costs could rise again if plans to bring the stations back online by the end of next month proved unworkable.

EDF insisted that its offer for British Energy remained compelling and was based on its long-term plan to use the group as a springboard to build nuclear facilities in Britain. It pointed out that new stations on existing British Energy sites would allow it to generate carbon-free electricity for 60 years, a step that would prove highly profitable in the long run.

British Energy reported pre-tax earnings of £257 million in the six months to September 28, down from £511 million a year ago.

John Hall, an energy analyst, said that the reactor problems, which led to a drop in the group's total power output for the half-year to 22.7terrawatt hours (TWh), compared with 30.7TWh a year ago, reflected broader difficulties facing Britain, which relies increasingly on an unreliable and ageing power infrastructure.

Mr Hall said that the high price of the deal - £12.5 billion - also looked less compelling after a collapse in wholesale energy prices this autumn and the turmoil in global credit and equity markets.

When EDF announced the deal, wholesale UK power prices were trading close to record highs of more than £115 per megawatt hour. They have since roughly halved.

“I think it's a superb deal for British Energy,” Mr Hall said, “but for EDF it's not as good as it looked a couple of months ago.”

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