TOSHIBA is in talks to sell as much as 49 per cent of Westinghouse, the nuclear power station business that it agreed to buy yesterday from British Nuclear Fuels for $5.4 billion (£3 billion).

Confirmation that the British taxpayer would bank four times the initial investment from the sale was accompanied by the revelation that Toshiba could make an immediate profit through the sale of a half-share in the nuclear power station company.

Mike Parker, chief executive of British Nuclear Fuels, said that there was no provision for the British Government to claw back any excess profit that Toshiba might make on the sale of minority stakes. “If they can sell it for a higher price, there is no clawback. That is very much Toshiba’s bet,” Mr Parker said.

Toshiba’s knockout bid of $5.4 billion, made last month in the final round of bidding in New York, has taken the nuclear industry by surprise. Initial expectations had been for Westinghouse to fetch about $1.8 billion. Toshiba said that bidding interest in the final three weeks of negotiations had pushed the price up.

Japan’s second-biggest electronics maker refused to disclose which investors it was talking to, but there was speculation that General Electric and Mitsubishi Heavy, who were outbid by Toshiba for the power station developer, could be interested in taking minority stakes.

Atsutoshi Nishida, Toshiba’s chief executive, said that the Japanese company expected its nuclear power business to triple in size by 2015 and said that it hoped to recoup its investment in Westinghouse in 15 to 20 years. “This is hugely significant for Toshiba’s future growth. We are pretty confident that no other company will be able to match the breadth and depth of this combination,” Mr Nishida said.

“There was a lot of competition in terms of bidding. Given the potential for future growth and profit, we believe this was the right price.”

Toshiba is a world leader in developing boiling water reactors (BWR), having entered the nuclear power business in 1966. The company has supplied most of the nuclear reactors operating in Japan at present.

Westinghouse, which specialises in the more widespread pressurised water reactors (PWR), has installed 98 nuclear power plants and is the leading supplier in the United States. The nuclear power plants company, based in Windsor, Connecticut, also operates 34 facilities in 14 other countries.

PWR represents about 60 per cent of the global market, while BWR accounts for less than 30 per cent. PWR is the technology likely to be favoured in China and the US.

Toshiba said that it would fund the acquisition out of its annual cashflow of about 100 billion yen (£481 million), adding that the deal “may have some impact in financial 2006”.

Alan Johnson, the Trade and Industry Secretary, said that the Government had decided to sell Westinghouse because it was unwilling to take on the risk of developing new nuclear reactors internationally. “This is an excellent outcome for the UK taxpayer,” he said.

BNFL and Toshiba will now apply for the necessary regulatory and other clearances with the hope of completing the transaction within six months.

• Any attempt by Gazprom, the Kremlin-controlled gas group, to take control of a major British energy company would be subject to crucial tests, Alan Johnson, the Trade and Industry Secretary, said yesterday. He told the Trade and Industry Select Committee that mechanisms existed to allow ministers to scrutinise any bid that threatened the national interest.

  “If there was a bid, we have a very robust competition policy.Ofgem and the competition authorities would have to be satisfied that consumers’ interests were safeguarded and government ministers have a role to play if there is a threat to the security of the State,” he said.

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