Japanese lifeline for BNFL's 'white elephant'

BNFL's controversial plutonium- uranium mixed oxide (MOX) plant is in line for an unexpected boost - from Japan. This will mark a huge reversal in fortune as a scandal involving falsified documents on MOX shipments to Japan five years ago severely damaged BNFL's business prospects and reputation.

BNFL's controversial plutonium- uranium mixed oxide (MOX) plant is in line for an unexpected boost - from Japan. This will mark a huge reversal in fortune as a scandal involving falsified documents on MOX shipments to Japan five years ago severely damaged BNFL's business prospects and reputation.

Record high oil prices and a dispute with China over gas fields have prompted a secretive Japanese energy committee to push for a major review of nuclear policy. Its expected recommendation is that Japan should embark on a dramatic upgrade of nuclear power stations, which will lead to lucrative orders for reprocessed fuel.

Building completely new nuclear sites is politically impossible, so Japan's energy plans will probably involve converting old and defunct stations into modern plants that use MOX - a fuel which BNFL and its French rival, Cogema, sell to the Japanese market.

The special energy advisory committee, part of the Ministry for the Economy, Trade and Industry (Meti), has been convened to deal with what one of its members described as "a long-overdue sense of crisis". Japan has few natural resources of its own, and depends on imported oil and gas for more than 90 per cent of its energy needs. Pipeline projects with Russia remain troubled by stalled negotiations, and a controversial oil-field development in Iran has brought Tokyo into direct opposition to Washington.

The panel is expected to conclude that updated nuclear sites offer the best chance of coping with future energy shortages.

A string of safety scandals, including a fatal steam leak earlier this summer, has destroyed trust in nuclear power among the Japanese public. That accident, stemming from a badly corroded pipe, is taken by industry experts as evidence that the existing stations are ripe for an upgrade anyway.

The committee, which includes several industry veterans from the 1970s oil crisis, may run into opposition from within Meti itself as it is understood to take a dim view of the ministry's support for electricity deregulation in Japan.

Aileen Myoko Smith, a director of the Japan-based nuclear watchdog Green Action, said: "The global energy situation has put Japan at a crossroads, and the pressure is all the greater for the country to build its dependence on nuclear power. The whole project will only work, of course, if it is treated as a huge national project and the government comes up with big subsidies."

Even with a host of potential new projects up for grabs, BNFL's success in Japan hangs by a thread. Sources in Fukui prefecture, a centre for nuclear power stations, say that sensitivities over the BNFL scandal mean the first batch of MOX orders are almost certain to be awarded to Cogema.

The MOX plant at Sellafield - which has been derided as a £600m white elephant - will be taken from BNFL's control next April and handed to the newly created Nuclear Decommissioning Authority.