British Energy ‘must agree rescue deal’

NUCLEAR power group British Energy still faces the “serious possibility” of going into administration, if the struggling firm is unable to agree a rescue deal with its creditors, the British Government warned yesterday.

The East Kilbride-based group, which produces around a fifth of Britain’s electricity needs, is battling to reach an agreement with banks and bondholders before the expiry of a government-imposed deadline of September 30.

The British Department of Trade and Industry yesterday said it “would not substantiate” newspaper reports that its officials were drawing up plans to renationalise the ailing power generator, if a deal could not be struck in the next three weeks. However, a DTI spokeswoman said ministers had always maintained insolvency was a possibility if the company and its creditors fail to agree. She said officials would “wait to see what happens” before deciding what needed to be done.