One of the French bidders for Britain's fleet of nuclear reactors has pulled out.

Suez, the giant French utility, had put its hat in the ring as up to 10 British and European power companies jockeyed to take over British Energy, the nuclear generator that supplies up to a fifth of the UK's electricity.

However, Suez said today it is walking away because of more pressing business at home and its merger with the French state gas supplier.

"The completion of the merger with Gaz de France remains Suez's key priority," the company said in a statement. "Accordingly, Suez confirms that in its discussions regarding the future development of the nuclear energy sector in the UK, those relating to a potential offer for British Energy have now ceased."

Because of that statement, the City Code on takeovers will prevent Suez from re-entering the race for British Energy until it completes its GdF merger.

The withdrawal of Suez seems to leave the battlelines for British Energy more cleanly drawn.

EDF, the French electricity monopoly which owns the old London Electricity and Seeboard companies, has made the running with an indicative bid for British Energy believed to be around £10 billion - including the 35% stake in the company held by the UK Government, a legacy of the taxpayer bailout of the company five years ago.

A sole EDF bid is likely to fail on competition issues as it would give the company more than 25% of Britain's generation capacity. Instead it appears increasingly likely EDF will team with British Gas group Centrica.

In competition with EDF is RWE of Germany, which already trades in the UK as npower. It has emerged that it could team with the Southern Electric group Scottish and Southern Energy.