LIFE AND TIMES OF BILL COLEY

Bill Coley is an industrial hero. As City bankers and hedge fund managers count the cost of investments and exposures which they patently failed to comprehend, here is a man who has rebuilt Britain's biggest electricity producer.

In three years at the helm, Coley has turned round British Energy from being a basket case running the country's nuclear generating fleet into a company at the centre of the debate over the future of UK power and which, to boot, has been for the last month the hottest buy order in the FTSE 100.

It is tempting to see Bill Coley, a perfectly mannered 64-year-old southern gentleman from North Carolina, with a drawl as drawn-out as the Blue Ridge Mountains, as a kind of folksy sheriff, hired from America's Bible Belt by UK Government enforcers to shake up an unruly, godforsaken company.

It would also be wrong, for Coley is no Labour patsy. For as this gun-for-hire has cleaned up what was a real Dodge City of a stock, Coley has now turned his Colt 45 on the ministers and civil servants sitting nervously in Whitehall's Last-Chance Saloon, where they continue to nurse a decision on ordering new nuclear power stations to fill Britain's increasingly wide domestic energy gap.

Coley has spent his tenure as chief executive since March 2005 being told he had been dealt a hopeless hand with British Energy's fleet of ageing and hapless nuclear power stations, and that he and his poorly performing company should be chased out of town. But all the time Coley has had an ace in the hole.

British Energy's current nuclear power stations may, in the main, be useless at producing as much electricity as they should, but they have one all-redeeming feature. They sit on the land - the only land - on which, politically, new nuclear power stations can be built. And as soon as Coley decided to challenge the Government and insist that legal ownership of that land was with British Energy, all the chips were his.

To realise what a hero Coley may now be in the eyes of British Energy shareholders, many of them "Sids" who stayed in during the carnage of near-bankruptcy in 2002, one has to go back to the last Conservative administration, whose last major privatisation British Energy was.

What shareholders were sold in 1996 was a company with one state-of-the-art asset, Sizewell B, and seven other second-generation advanced gas-cooled reactors which were even then already nearing decommissioning.

The following years saw big profits, big dividends, big smiles. And then the generating market was deregulated, the Electricity Pool cartel was broken up, the price of power collapsed and, with it, power company profits.

Within a year of Labour's first big industrial disaster, the bankruptcy of Railtrack, came the electricity industry's version, complete with the same story that a complacent management had squandered the dowry and failed to invest in the now-ailing assets. British Energy was all but bust. However, New Labour had learned its lesson. Instead of the messy quasi-nationalisation we saw on the railways, Industry Secretary Patricia Hewitt indulged in legally questionable state support, sending in the accountants to take British Energy's billions of pounds of nuclear clean-up liabilities and dump them into a Government agency.

After nearly two years in a state of legal limbo, a new British Energy emerged into a market of rising electricity prices. From this, despite months of shutdowns and outages at poorly performing plants, even it could not fail to make profits of £1 billion a year and regain its place in the FTSE 100 index. And it was at precisely this point that Coley surfaced, in frankly bizarre circumstances.

British Energy had had three chief executives in as many years, the first two tainted by the original failure but the third, Mike Alexander, hailed by the company's new chairman Adrian Montague - yes, the same Labour placeman who had stewarded Railtrack into Network Rail - as the right man for the job, having been poached from Centrica. As it turned out, Alexander was not the right man for the job, amid whispers that he did not cut it among British Energy's legion of experienced and proud nuclear engineers.

Montague then turned to Coley, a retired, sexagenarian veteran of the US energy industry, who had taken a position as a part-time non-executive director in the restructured British Energy.

Coley was and is folksy. Not only did he work for the same company in his home state for 37 years, he has been married to the same woman - Jane, a high-school sweetheart - for 41 years and was, back home, a pillar of his local Presbyterian church. But he was also a graduate engineer, a man who knew his way round a power station or two and he "spoke the right language" internally.

Yet his appointment appeared to smack of desperation. Not least because he had a bit of history: Coley had taken early retirement from his former US employer Duke Energy, whose accounts had been raided and found to be lacking by regulators in the backwash of the Enron clampdown. Accepting the invitation to run British Energy cannot have been easy for a man who has admitted hearing the call of the golf course. His description of the job has not risen above the "it's interesting" level and, for an industry professional, the quarterly apologies to the City for the failure of one plant or another - the curse of the Hs, for if it wasn't Hunter-ston or Hinkley Point, it has been Hartlepool or Heysham - have plainly been embarrassing.

"Bill's had two main problems," says one executive who knows him well. "The first thing is that the kit he has had to work with is crap; it's last-generation nuclear which has suffered from under-investment. The second has been what they called a record of human performance error. There were screw-ups, and these were the things that Bill could not forgive and which he sought to control and eliminate. It is at these times that the good ol' boy becomes pretty fierce."

The operational improvements have had Coley crowing.

"Amongst the performance of nuclear plant worldwide, I can tell you that you will be hard-pressed to find any performance better than Sizewell anywhere," he says. "And at Dungeness [where Coley's engineers have extended the life to 2018 from planned closure this year] we have been online uninterrupted for a record 665 days. This under-lines the Government's confidence in our abilities."

As for any counter-argument to new nuclear build, Coley says: "If climate change and carbon are the question, then nuclear has to be part of the answer. And if you set carbon objectives and targets on generation, then we have done the maths: nuclear has to be part of the equation."

Less than two years ago, the thought that British Energy would hold the keys to new nuclear was laughable.

However, armed with an operational record and the sureness that it and its shareholders - rather than the Government or the state - has legal ownership of the brownfield land next to the existing power stations on which the new nuclear generation can be built, Coley has forced ministers to take account of him.

The Government is still pulling the strings, for it has a residual 35% stake in British Energy as an overhang from its 2002 rescue. Analysts, however, are now becoming more certain that, cash-strapped as it is, the Government will aim to sell that stake to any of the current UK domestic energy companies who are vying to team with British Energy to help provide the potentially tens of billions of pounds of investment needed to begin new build.

The runes, say analysts, are also indicating the Government will not slap a 15% limit on any new shareholder in British Energy on national security grounds, which alone has sparked the story that the company could fall to an outright takeover by one of its venture partners. In these circumstances, British Energy shares have surged 40%, as any or all of the Germans of E.On (formerly Powergen) and RWE (owner of npower) or the French of EDF, which supplies London and the South-East, appear to line up to front a bid.

Little Englanders may fret at the prospect of Britain's nuclear plants ending up in the hands of this Franco-German axis, ignoring the fact this trio has already been free together to build a market share of around a third of the country's electricity and gas market.

The irony, of course, is that the saviour of British Energy is himself no Brit - though one whose work is clearly coming to an end and who can already hear the call, once more, of the golf course.