TWO American and two Japanese bidders have been shortlisted as buyers for Westinghouse, the Pittsburgh-based nuclear power station developer that has been put up for sale with a £1 billion price tag by British Nuclear Fuels (BNFL), The Times has learnt.

The shortlist, which includes General Electric and the Shaw Group, two giants of the US energy industry, comes amid mounting pressure from Washington that the unit should be sold to an American company.

Final bids for the Westinghouse unit are expected to top £1 billion next month as the Japanese conglomerates Mitsubishi Heavy Industries and Toshiba compete with GE, which is working with Cerberus investment fund and the Shaw Group, the Lousiana-based engineering and construction group.

It is understood that senior managers from Westinghouse and companies in which Westinghouse has significant investments have begun making presentations to the four bidders.

A data room has been opened by NM Rothschild, which is overseeing the sale. Due diligence is expected to take another month, and a preferred bidder is likely to be chosen towards the end of next month or early in 2006.

Although Westinghouse has been owned by the British Government through BNFL since 1999, two thirds of its 8,000 workers, most of its assets and its headquarters are in the US.

The Committee on Foreign Investments in the US (CFIUS), the panel that vets foreign takeovers on national security grounds, will have to clear the sale. America’s Nuclear Regulatory Commission will also have to approve it.

“The sale is going to be scrutinised because it’s a significant US asset and is operating in a sensitive area,” a source said. “It could take many months to get the necessary clearances.”

There has been increasing alarm in some parts of Congress that sensitive businesses could fall into foreign hands. The aborted bid this summer by CNOOC, the Chinese oil company, for Unocal, the California-based oil company, caused anxiety on Capitol Hill.

Some lawmakers, led by Richard Shelby, chairman of the powerful Senate Banking Committee, want the CFIUS to take a more robust stance in investigations and to act in a more transparent way. They believe that the definition of national security should be widened to include economic security.

Mr Shelby has supported legislation that would have given Congress — not the President — the final say on whether a takeover should be approved.

Since America, China and other developed countries have said that they expect to begin building a new generation of nuclear power stations, Westinghouse’s appeal to buyers has soared.

BNFL, which bought the company for £641 million, has said that it is selling it because it does not want to be exposed to the financial risks of a new construction programme. Westinghouse has been responsible for building more than half the nuclear reactors in operation today.

BNFL declined to comment.

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