E.ON, the German energy group, has been buying up farmland in south Gloucestershire as it firms up plans to build a £4 billion nuclear power station beside the River Severn.

A spokeswoman for E.ON confirmed that it had acquired several tracts of privately owned land in recent months around an existing nuclear site at Oldbury-on-Severn, north of Bristol, which is owned by the Government through the Nuclear Decommissioning Authority (NDA). The NDA site has two 225MW Magnox reactors that have been operating since 1967 but are scheduled to be retired from service at the end of the year.

Buying extra land around the current compact site could allow E.ON to build a far bigger so-called EPR reactor, which would generate 1,600MW of electricity - enough to power a city of a million people.

The spokeswoman said that E.ON was looking at a variety of potential sites for new nuclear stations, of which Oldbury was only one.

However, E.ON has applied for a National Grid link to the site, which would let it build a French-designed EPR nuclear station by April 2020. An EPR's cost is estimated at £4 billion.

As well as the Oldbury site, the NDA is selling nuclear sites at Wylfa, on Anglesey, and Bradwell, in Essex. The NDA is also studying which parts of the Sellafield site in West Cumbria it could sell for the development of nuclear power stations.

E.ON's interest in the Oldbury site comes as EDF is awaiting regulatory approval for its proposed £12.5 billion takeover of British Energy, the UK's largest nuclear generator. The takeover would give it control of most of the preferred sites for new British nuclear power stations. EDF wants to use the takeover as a platform for development of four new EPR reactors, most probably at Hinkley Point, in Somerset, and Sizewell, in Essex.

Toshiba-Westinghouse, the nuclear reactor builder, is also interested in developing the NDA site at Oldbury. However, it is unclear how soon the Oldbury site will be available because the nuclear plant is seeking consent to extend its generating life. The Nuclear Installations Inspectorate is to decide. The plant, scheduled to stop generating electricity in seven weeks, could stay in use for two years.

E.ON is also understood to have considered building a nuclear plant at Kingsnorth, on the Isle of Grain, Kent, where it is seeking consent for a coal-fired power plant.

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