THE secretive American investment firm Cerberus Capital Management has burst into the £1 billion auction of Westinghouse, the nuclear power-station company owned by the British government, by mounting a joint bid with General Electric.

More than a dozen international energy companies and private-equity firms have submitted offers. Sources close to the auction say the strong field could drive the price well north of the estimated £1 billion price tag.

Companies understood to have submitted offers include Mitsubishi Heavy Industries, Toshiba, Doosan Heavy Industry from Korea, GE-Cerberus and Fluor, a US project-management group.

British construction and services group Amec, which had been tipped as a bidder, has not joined the race. Areva, the French nuclear-power group which had been regarded as a leading contender, has also dropped out.

Industry sources say the deal could spark a clash between Whitehall and Washington.

Although BNFL is owned by the British government, the sources said the sale of Westinghouse was likely to be closely scrutinised by the American authorities, and might have to be formally approved by the Committee on Foreign Investments.

The committee looks at deals that could involve the transfer of sensitive technology, such as military hardware. But recently it has taken an interest in other sectors, and played a role in the recent abortive Chinese bid to buy American oil company Unocal.

Some industry sources say there could be considerable pressure on the British government to push Westinghouse towards an American bidder, rather than see sensitive nuclear technology go to the Far East.

Westinghouse was bought by BNFL five years ago from CBS, the entertainment group. BNFL paid $200m (£113m), but once debt and other liabilities were taken into account the deal was worth $1.1 billion. Under BNFL, turnover has gone from £800m a year to £1.2 billion, and profits from £20m to £40m.

Renewed interest in nuclear power — China, America and the UK are all considering new plant construction to reduce reliance on fossil fuels and help curb global warming — have made Westinghouse a valuable asset.

It has the only new reactor design approved by American nuclear safety regulators, and is bidding to take part in the Chinese reactor programme.

Westinghouse was put up for sale this year as part of a restructuring of the British nuclear industry. Until April it employed 1,200 people at Springfields, near Preston, at a plant that makes reactor fuel. These workers have now been transferred to the government’s Nuclear Decommissioning Authority.

BNFL declined to comment on the sale last night.

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