Sellafield on last legs as British nuclear power stations pull out

British Energy, the last major customer for the crisis-ridden Sellafield nuclear plant, is to dramatically reduce its commitment to reprocessing there.

The company, which operates eight nuclear power stations and provides about a quarter of Britain's electricity, is to renegotiate its contract with the Cumbrian plant.

British Energy accounts for a third of Sellafield's reprocessing business and the move will throw its future into even greater peril. Until now the British nuclear industry has given Sellafield its full backing.

The news follows hard on the heels of bans on trading with Sellafield from every one of its main overseas clients after the Independent disclosed that it had falsified safety data.

It caps a dreadful few weeks for British Nuclear Fuels, the publicly owned company that owns Sellafield. As well as coming under intense pressure to close the plant down, it risks losing contracts to operate Britain's nuclear weapons facility at Aldermaston and to clean up US nuclear sites.

Ministers have indefinitely postponed plans partially to privatise the company. Tomorrow the Danish and Irish governments will unveil plans to get international agreement to stop reprocessing. And the US government is sending a team of investigators there before deciding whether to carry on doing business with BNFL.

At present, all the fuel from British Energy's seven advanced gas-cooled reactors and one pressurised water reactor is due to be reprocessed - separated into plutonium, uranium and nuclear waste - at Sellafield. But the company now wants to move away from reprocessing to having the used fuel stored untreated because storage is much cheaper. British Energy's share price has fallen to less than half the level of six months ago.

Peter Hollins, its chief executive, told MPs last week: "Storage is ... more attractive to us from an economic point of view. That is increasingly the direction we want to go." The company will not be drawn on how much it is aiming to cut its reprocessing business, but makes it clear that it is expecting to get a significant reduction.

Japan, which accounts for another third of Sellafield's business, has banned all shipments of fuel from the plant since discovering that safety data on one of them had been falsified. Germany, its second major customer, stopped nuclear trading with the plant after the Independent on Sunday disclosed last month that it, too, had received fuel with falsified records.

Bridget Woodman, a nuclear campaigner with Greenpeace, said last night that it would be almost impossible for Sellafield to recover from the latest blow. She said: "Sellafield has risen from the grave many times in the past but this time it is the British nuclear industry itself that is driving a stake through its heart."