British Energy, which produces more than 20 per cent of the country's electricity, is in increasing danger of being put into administration, government officials said on Monday.
    The full extent of the company's debts, now emerging, has persuaded the government to contemplate allowing it to go under.
    Administration would carry significant costs for the state, the company has warned. Because the nuclear power stations run by the company would have to be kept going, it would not simply be wound up. Instead, the administrator would have to run some form of holding operation, pending possible changes in the government's long-term strategy for nuclear energy.
    "There are lots of things we could do to make a long-term future for British Energy, but whether it's still called British Energy or not is not decided," one official said. "This week, we are still trying to get to the bottom of the figures."
    Shares in the group fell a further 37.5 per cent, or 6-3/4p, to 11-1/4p on Tuesday.
    Ministers are frustrated and angered by the time it is taking for the company's true financial picture to emerge, boding ill for the senior management's long-term job prospects. "This is not a complicated business," one official said.
    But the extent of the debts already clear has forced a change in government thinking. The threat of administration - initially seen as a last option if the company failed to co-operate in rescue efforts - is now "very much an option", a senior government official said Monday night.
    British Energy has warned ministers that exercising this option could wipe £650m (€1bn) off the value of its assets and widen its trading losses.
    Administration would allow the Canadian government to reclaim British Energy's 82 per cent stake in the profitable Bruce Power business, worth about £500m, while a fire-sale of the group's stake in AmerGen, a US joint venture, could halve the value of the asset to £150m.
    Energy trading contracts with customers would also cease to be valid as the necessary financial guarantees would no longer be in place. Electricity would have to be sold at low spot market prices, potentially increasing losses by £100m a year.
    But ministers may decide this is nonetheless a price worth paying. Officials say that as they have "dug deeper into the figures", it has emerged that it could cost the taxpayer less to put the company into administration than to keep the company limping along in the private sector with state support. Company demands to extend - and possibly increase - the £410m short-term loan offered as an emergency measure last week have reinforced this view.
    "We thought there were two options - keeping the company in the private sector or administration. Now the two are beginning to shade into each other," an insider said. "If the company's assets are not worth much more than its liabilities, and the [state funded] loan is extended, then is the company still a private company?"

    The reports of safety lapses, fraudulent repairs and cover-ups at Japan's largest nuclear power company began with a trickle but resounded into an industry nightmare.
    The details, filled in over the last two weeks by one alarming report after another, show a potentially catastrophic pattern of cost-cutting along with 16 years of cover-ups of serious flaws, evidently in an effort to preserve public trust. These include the systematic falsification of inspection and repair records at 13 reactors at the company, Tokyo Electric, the world's largest private electrical utility.
    Compounding the public relations disaster, a reactor that the company operates in Fukushima Prefecture, in northern Japan, was closed temporarily last week because a chimney was emitting more than 100 times the usual level of radiation.
    In accordance with the ritualized apologies that Japanese business culture demands, the president of Tokyo Electric, Nobuya Minami, and four other senior officials resigned. But many Japanese are talking about a far larger casualty, the rock-solid consensus behind nuclear energy that has existed here for decades, and which has made Japan's industry the world's third-largest, behind the United States and France, and perhaps its most ambitious.
    Even senior members of the government have expressed their outrage over the scandal. "It is absolutely abominable that this incident caused the people's confidence to be largely lost in nuclear energy," said Takeo Hiranuma, the industry minister. Statements like his are rare; for decades the government has been an almost unconditional backer of nuclear power.
    But a groundswell has been building against nuclear power here for at least three years. It began when cost-cutting and sloppy work led to a fission chain-reaction at a uranium-processing plant in Tokaimura, 110 kilometers (70 miles) northeast of Tokyo, in 1999. The anger gained momentum last year after investigators discovered that radioactive coolant water had been leaking, undetected, from cracks in the aging reactor vessel in Hamaoka for at least four months.
    The Tokaimura incident was Japan's worst nuclear-related accident. Two people were killed, thousands of people were exposed to at least moderate levels of radiation, and the town center had to be temporarily evacuated during a cleanup.
    Company officials have said they were worried that if the public became aware of cracking at the reactors, people would be frightened.
    On Monday, it was learned that the government gave Tokyo Electric the name of the whistle-blower who reported the cracking to the company, in a further effort to keep things quiet.
    The Tokaimura accident shocked the nation, and critics of the nuclear industry now say the government's condemnations of safety lapses and fraud may be too little, too late.
    Since Tokaimura, local communities have voted in referendums to block new plants, and in other cases mayors and governors have promised to do so. That has galvanized action against the nuclear power industry as never before.
    "At first, people had no other choice but to trust the government, because this is such important technology," said Eisaku Sato, the governor of Fukushima Prefecture, the home of some of the troubled Tokyo Electric plants. "Then this incident occurred, and the trust between us, which was never more than a thin red thread, was completely cut off."
    Just one day earlier, Masazumi Nishikawa, the mayor of Kashiwazaki City, in Niigata Prefecture, told Tokyo Electric to cancel its plans to introduce plutonium fuel into a conventional local reactor that was designed to burn uranium. The prefectural governor, Ikuo Hirayama, has seconded the mayor's moves.
    Anti-nuclear activists say they can now foresee a day when Japan joins countries like Germany and Belgium in banning new nuclear plant construction. Plant construction in the United States has long been frozen though not banned.
    "This kind of scandal, where there have been cover-ups for 10 years, causes a fatal doubt of government policy on nuclear energy," said Kiyoshi Sakurai, an industry critic and a physicist. "We will end up like Americans and some European countries, turning away from nuclear energy."
    Nuclear-generated electricity has been the bedrock of Japan's energy policy since the oil shocks of the 1970s, which hit Japan far worse than the United States, considering that Japan was a manufacturing economy without local supplies of oil.
    The country embarked on a crash program to build dozens of nuclear power plants.
    But it also poured tens of billions of dollars into the development of plutonium-burning reactors, known as fast-breeder reactors. The technology, though unproven, theoretically would produce more nuclear fuel than the reactors burn.
    The most frightening revelation in the unfolding Tokyo Power scandal has been that falsified inspection records had papered over large cracks in the stainless steel shrouds that cover the core of nuclear plants, allowing the reactors to operate for years without costly repairs.
    For many, this recalled an explosion at a nuclear plant operated by the Nagoya-based Chubu Electric Power Co., at Hamaoka, last November. The investigation there revealed the radioactive leaks.
    The Hamaoka plant began operating in 1976, and anti-nuclear activists in Japan have seized upon incidents like the one last year as evidence that many of Japan's 53 nuclear reactors, operating well into their third decade, were aging and presented a safety risk.
    Aging has emerged as a major concern in the United States, too, particularly since the discovery in March of a hole in the top of the reactor vessel at the Davis-Besse reactor near Toledo, Ohio.
    Unforeseen corrosion by boric acid has nearly eaten through the 15-centimeter (6-inch) thick steel vessel that contains the reactor's core.
    Investigators in the United States are also looking into whether the plant's inspection or repair records were falsified.

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