Path smoothed for resurrection of British Energy sale

Talks between EDF and Invesco Perpetual's Neil Woodford, the rebel British Energy shareholder who last month derailed a £12bn offer from the French giant for the nuclear group, are set to continue tomorrow. Sources suggest moves to sweeten the original deal could be agreed by the end of the week.

It is believed Mr Woodford, who runs a fund controlling 15 per cent of British Energy stock, is ready to accept proposals put forward by EDF's management to improve the original deal, which will be linked to the future performance of the group.

A source close to EDF said: "It would be too optimistic to suggest there were breakthrough talks last week, but the chances of a deal have certainly improved."

Mr Woodford, who declined to comment, is also thought to be softening his stance in the wake of the dwindling oil price, which last week edged back toward $100 a barrel.

Talks between M&G, the fund manager that also opposed the original EDF offer, and Mr Woodford are thought to have taken place last week. Managers from M&G are not thought to have spoken with EDF at any point.

On Friday M&G said it preferred a rival bid from Centrica, claiming the EDF offer still undervalued the company.

If EDF pulls off a deal for British Energy, part of the plan is for Centrica, the UK's biggest electricity provider, to take a 25 per cent stake in a new company with EDF.