The House of Commons Trade and Industry Select Committee is expected to call for billlions of pounds of extra liabilities to be loaded onto the soon-to-be-privatised nuclear industry, which is scheduled for sale in the middle of the year.
In a further blow to the Government, a report from the committee to be published within weeks may also advise that the newest reactor, Sizewell B, be withdrawn initially from the sale.
The Government's plans for the pounds 2.5bn sale include the establishment of a "segregated fund" into which the new company, British Energy, would make payments to cover decommissioning of power stations and clean-up of sites.
But there is a growing feeling that the fund should be extended to cover a wider range of costs including fuel reprocessing and waste management. This could add billions of pounds to British Energy's annual outlays and make the privatisation much less attractive to investors.
Martin O'Neill, chairman of the select committee, said a number of issues had yet to be decided by the MPs. But he added: "The question of the segregated fund is one of the most important. The issue of the segregated fund will have a material impact on the valuation of the privatisation. The more items which are included, the more money will be needed to meet the costs."
Last month a leading City analyst warned that disposal of intermediate and high-level nuclear waste could be a big stumbling-block in attracting investors to the sale.
In evidence to the Select Committee, John Renolds, of the brokers James Capel, said the issue of waste disposal and the related financial risk could cause significant concern for potential investors in British Energy, the company set up to run the most modern reactors.
He said that British Energy's shares in Nirex, the nuclear industry's waste-disposal company, is "a small stake in what could be a very big black hole".
The concern over the fund and the doubts over the saleability of Sizewell B back Labour's argument for abandoning the privatisation completely. The ageing Magnox reactors are already excluded from the sell-off, leaving only Sizewell and the family of advanced gas-cooled reactor plants.
The committee's doubts over Sizewell are based on its limited record after only one year of operation and any recommendation would be likely to say that it should not be included in the initial privatisation, if not altogether wihdrawn. But any delay would encourage those who want the entire process frustrated in the hopes that Labour would come to power.
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