£12BN EDF TAKEOVER DEAL COLLAPSES

EDF, the state-controlled electricity company, had been expected to announce a £12 billion deal, but it said on Thursday night that "conditions for a major development in Great Britain" had not been met.

British Energy, which owns eight nuclear power plants and generates around one-sixth of the UK's electricity, said that "advanced discussions with a party have continued but without agreement to date".

Reports said the proposed deal - the subject of discussions lasting several months - broke down after two of the UK company's biggest City shareholders requested EDF put more money on the table.

British Energy, which is part-owned by the Government, is seen as a key part of plans to boost Britain's nuclear energy production.

With 58 nuclear power stations, EDF is well placed to take a lead role in the development of a new generation of UK nuclear power plants.

Business Secretary John Hutton told BBC Radio 4's Today programme that the Government was disappointed the deal had fallen through. But he said ministers would work to ensure Britain still got the new nuclear power it needs.

Mr Hutton said: "We are disappointed by the failure to reach an agreement overnight. I think it would have been a good fit. EDF are, as people know, the world's largest nuclear operator. I think it would have been a very sensible way to take forward new nuclear plans in the UK.

"But...the future of new nuclear in the UK doesn't depend on this particular deal.

"It's up to the board now and EDF to see if there is any way that this gap can be bridged but I think we are absolutely committed to new nuclear power and if this deal is not able to go through for whatever reason, we will be looking at plans to make sure we can continue with our foot on the floor because Britain needs these new nuclear power stations."