LOSSES at British Nuclear Fuel's Magnox reactor division soared to about £100m last year, pushing the company into the red.

BNFL, which the Government still hopes to privatise and which made an operating profit before exceptionals of £65m a year earlier, has also been hit by problems at its Sellafield site in Cumbria which could cost up to £50m.

The figures emerge as BNFL prepares to open talks with the Government over massive nuclear liabilities, which have soared to around £34bn. BNFL is responsible for £10.5bn of those liabilities and has shareholder funds of only £300m.

The company fears that without government underwriting or some form of guarantee, investors will shun any privatisation process. Magnox power plants account for around 60 per cent of the £10.5bn and although BNFL has announced plans to shut all the Magnox plants by 2009, the related liabilities will live on for many years.

At the same time BNFL is awaiting approval to operate its mixed oxide plant (Mox) at Sellafield, which it sees as the key to the future of the whole site. BNFL was plunged into chaos last year after Sellafield employees falsified data on mixed oxide fuel bound for Japan.

The Nuclear Installations Inspectorate accused BNFL of being guilty of "systematic management failure" and of having "a serious safety culture problem". BNFL has since made sweeping changes in management and processes throughout Sellafield and has appointed a new chief executive, Norman Askew, to drive the company forward. It is now awaiting the outcome of an eight-week government consultation on the Mox plant.

A source close to the company said: "The new management has made the right decision to exit the Magnox business. They were sold a pup by the Government and they now need the right decision on the go-ahead for the Mox plant."

29 March 2001: Review of BNFL mixed oxide plant revived
4 March 2001: The nuclear option
28 May 2000: [UK News] British Nuclear Fuels faces bankruptcy
24 May 2000: BNFL to close all its nuclear power stations
19 April 2000: [UK News] Executives ousted as Sellafield tries to improve safety

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