Sellafield, Europe's most heavily contaminated industrial site, went under the hammer yesterday.

Iberdrola, the Spanish energy giant that owns ScottishPower, is expected to be among the bidders for a 250-hectare parcel of land adjoining the main site in West Cumbria where Britain mastered the technology to build the atomic bomb in the 1950s and later built the world's first commercial nuclear power plant.

John Clarke, the Nuclear Decommissioning Authority's commercial director, said that the plot - which is expected to raise at least £100 million for the Treasury - had “outstanding potential” as a site for development of a new reactor, likely to cost at least £4 billion to build.

Some experts have criticised Sellafield's suitability for a new reactor because it is a sprawling landscape of chimneys, storage ponds filled with nuclear waste and radioactive buildings awaiting demolition. “It is a very complex site,” one industry insider said. “It is not necessarily the simplest place to build a new power station.”

About 10,000 people work at Sellafield, mostly on decommissioning contaminated buildings, many of which date back to the 1950s.

The sale of Sellafield, and farmland stretching around the northern perimeter of the main site, follows the auction in April of three other government-owned sites for new nuclear plants to European utilities for a total of £387 million. A consortium comprising RWE and E.ON, of Germany, bought sites at Wylfa, on Anglesey, and Oldbury, in Gloucestershire, while EDF, of France, bought another site at Bradwell in Essex.

However, it is unclear whether there will be sufficient interest in Sellafield to ensure a formal auction. The site could be sold directly to Iberdrola if it is the only party to express an interest.The NDA expects to conclude the sale this year.

EDF is planning to build four reactors on two sites owned by British Energy, the UK nuclear generator that it bought last year for £12.1 billion.

Yesterday, shareholders in Centrica, the owner of British Gas, voted overwhelmingly in favour of the company acquiring a 20 per cent stake in British Energy from EDF.

British Energy's eight operational nuclear plants supply about 17 per cent of the country's electricity.

However, all but one of those are due to be retired from service over the next 15 years.

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