THE sale of Westinghouse, the nuclear-reactor maker, is set to raise almost $5 billion (£2.8 billion) for the government, twice the original estimate. Bidders were this weekend submitting final offers to BNFL, the state nuclear agency that owns Westinghouse. BNFL’s board, led by chairman Gordon Campbell, is expected to select a preferred bidder on Thursday.

The rising price of Westinghouse confirms the global revival of interest in nuclear power. This will be underlined when Malcolm Wicks, the energy minister, starts a review of energy policy tomorrow.

He is expected to give the clearest hint yet that Labour will give the green light to the controversial construction of new nuclear power stations. A team has been set up at the Department of Trade and Industry to look at new nuclear plants.Westinghouse and Canada’s Candu are regarded as favourites to build the plants.

Wicks’s consultation document will propose greater use of clean coal and innovative technologies such as carbon capture and undersea carbon-dioxide storage to bring down levels of greenhouse gases. Decisions are expected in the summer.

Analysts had thought Westinghouse might fetch $2 billion. But a last-minute bidding war between two Japanese groups, Toshiba and Mitsubishi, and the American conglomerate General Electric, is understood to have pushed offers close to $5 billion.

A blow-out price would be a coup for Campbell and BNFL’s senior management. Whitehall sources said yesterday it had resisted Treasury pressure to go for a quick sale of Westinghouse 12 months ago, arguing that growing interest in nuclear power would push up the price.

Sources close to the negotiations said the Japanese bidders appeared to be in the lead on price, but that American concerns over the sale could yet hamstring the deal.

Last week the Japanese bidders appeared to be trying to head off American criticism by forging alliances with American partners. Mitsubishi teamed up with the Washington Group, an influential American defence-services and construction company, while Toshiba has joined forces with the Shaw Group, and GE was reported yesterday to have found a Japanese partner in Hitachi.

Meanwhile, the government is drawing up plans for a mandatory emissions-trading scheme for British industry that goes far beyond the one already in place in Europe. It precedes a review of the government’s flagging climate-change programme expected in a few weeks.

The wide-ranging emissions-trading scheme is one option being seriously considered as Britain struggles to meet its climate-change obligations. Britain has pledged to make significant carbon savings by 2010.

The scheme will extend to sectors not covered by the European scheme or current climate- change agreements, including retailing, manufacturing and the public sector.

BNFL had intended to use Westinghouse as a cornerstone of an international nuclear- energy business. But Labour has instigated a shake-up of the state nuclear industry. A new agency, the Nuclear Decommissioning Authority, has assumed responsibility for the £60 billion clean-up of Britain’s nuclear legacy, while BNFL is to be broken up and sold off.

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