Shares in British Energy soared close to new highs today as the City warmed to the idea that the country's nuclear generator is about to fall to a takeover by Centrica teaming with either EDF of France or RWE of Germany.

British Energy leapt 11p to 722p. Despite choppy times on the stock market, the shares have risen 75% since last autumn. They are now close to their highest since the business re-emerged from a massive debt-for-equity swap in January 2005 after the Government stepped in during the prior two years to prevent the company going bust and relieving it of its billions of pounds of nuclear clean-up liabilities.

British Energy has effectively been up for sale since last month when it became known the Government was seeking a buyer for the residual 35% "shadow" stake it has held since that bailout.

The company, which produces nearly a fifth of Britain's electricity, mostly from its eight nuclear power stations, admitted talks with potential partners about getting together to build new nuclear plant had advanced further than straightforward joint venture negotiations.

It is understood British Gas group Centrica has been offered the Govern-ment's 35% stake in British Energy, a holding which would ordinarily trig-ger an automatic takeover offer.

Centrica is keen to participate in investing in new nuclear build - carbon-neutral nuclear will help it offset the green penalties its gas-powered plants face - but has made it plain it does not want to own British Energy outright.

Rather, it would be keen to partner a company with nuclear expertise. EDF and RWE are the pre-eminent nuclear operators in their home markets and are big in the UK via their EDF Energy and npower retail brands as well as owner-ship of several coal-fired power stations. New nuclear power stations will cost at least £2.5 billion each to build.

The true long-term cost of nuclear was brought into sharp relief today as a cross-party committee of MPs warned the Government its £73 billion clean-up budget for the last generation of nuclear facilities could easily be breached. The Business and Enterprise Select Committee said the funding model of the Government's Nuclear Decommissioning Authority - which continues to run old Magnox stations like Wylfa - is "unsustainable" .