Nuclear power generator British Energy today boosted its chances of attracting a bumper takeover offer as its profits smashed City forecasts.

Underlying profits fell from £1.22 billion to £882 million last year - an outcome described as "disappointing" by chief executive Bill Coley, but well ahead of market forecasts of about £800million.

The stock has risen sharply since British Energy this month revealed that at least two parties had made proposals higher than 680p a share, which the City expected to be the top price of any offer.

Coley today said discussions with suitors were continuing but shares fell 11½p to 725½p following the recent rally. Including the Government's 35% stake, British Energy is worth about £11billion.

Among those in the frame are thought to be French state-owned electricity group EDF, Iberdrola of Spain and Germany's RWE, as well as British Gas owner Centrica and Scottish and Southern Energy. However, concerns are rising that EDF is the only serious bidder, with politicians, unions and consumer groups worried about the possibility of a French state-owned group controlling Britain's nuclear future.

The takeover talks follow a difficult year for British Energy after nuclear output was hit by problems at a number of its plants, including boiler closures at Hartlepool and Heysham. Total output was flat at 58.4 terrawatt hours after a fall in nuclear output was offset by an increase in coal output.

The company was yesterday rocked by a shutdown at the Sizewell B nuclear power plant in Suffolk, which caused power cuts across Britain. Coley today said it was caused by an instrument fault as opposed to the reactor, and added that the plant, which provides about 3% of Britain's electricity, would be up and running again in days. He also pledged to get Hartlepool and Heysham back in action by the end of this year and said operating levels at Hunterston Reactor 3 had risen from 55% to 70%. "Despite disappointing financial performance, we have made good operational progress," he said. "We have a fairly simple business model. Output drives financial results."

The results for the year to 31 March were boosted by rising electricity prices in the final quarter. Overall, prices fell from £44.20 per megawatt hour to £40.70 last year although British Energy recently secured a deal for this year at £65 per megawatt hour.