But the court accepted there had been no real danger of a meltdown at Nuclear Electric's Wylfa power station on Anglesey, Gwynedd, after an accident on 31 July 1993.
Mr Justice Morland told Mold Crown Court he was considering imposing an exemplary six-figure fine today on the company, which is to be privatised soon. He said the blame fell on the company as a whole rather than any individuals.
``The law not only imposes absolute obligations but the breach of those obligations at company level must be reflected in penalties that at least to a degree hurt,'' the judge said.
It was the second time the utility has found itself in court over the incident, which began when part of a refuelling crane broke off and fell into the reactor, damaging it.
Radioactive sulphur-35 and carbon-14 gases were deliberately leaked into the atmosphere by station staff after they detected a build-up of radioactivity which resulted from the damage, the earlier court hearing was told.
Nuclear Electric claimed so little radioactivity was vented that no threat was posed to the public, but it was fined pounds 34,000 in March last year on charges under the Radioactive Substances Act brought by HM Inspectorate of Pollution, the first prosecution of its type in Britain. Magistrates at Amlwch, Anglesey, also ordered Nuclear Electric to pay costs of pounds 20,170.
The head of Britain's Nuclear Inspectorate, Dr Sam Harbison, said in a statement to the court during the latest hearing that the events were potentially the most serious in the UK during his time as chief inspector.
But the court was told yesterday by the defence that the possible consequences were never worse than a "clad melt" within one of the 6,156 channels which convey carbon dioxide coolant gas through the reactor. That could have led to a fire in that channel and the release of radioactive particles.
Staff could have been exposed to radiation and food restrictions might have been imposed within a kilometre of the plant, he said.
Robert Owen QC, for the defence, denied the prosecution's claim that staff had their "brains in neutral", saying: "Far from it, their minds were very much in gear. Throughout that period men with vast experience were considering with the utmost care what the implications of the situation they found themselves in were.
"They arrived at the wrong answer but that answer was understandable given their confidence that had the channel been blocked there would have been clad melt within seconds."
Mr Owen also denied that Nuclear Electric had kept the reactor running to avoid losing money for interruption of electricity sales.
The company is also being prosecuted by the Government's pollution inspectorate for failing to keep a waste-gas system in good repair inside its Hinkley Point "A'' station, in Somerset, after an inspection of pipework last year. The case at Bridgwater magistrates court was adjourned until 11 October.
t The TUC announced yesterday it would be mounting a campaign to halt the forthcoming privatisation of Britain's nuclear generating industry.
A Mori opinion poll conducted on behalf of unions in the power industry has found that only 15 per cent of people supported privatisation of the nuclear industry, with 60 per cent opposition to the idea.
Fears of the public having to pay the high decommissioning costs for the old Magnox reactors such as Wylfa, which will not be privatised, will be a central feature of the TUC's campaign. The safety aspects of the privatised nuclear industry will also feature strongly.
John Edmonds, general secretary of the GMB, described the proposed sell- off as a "recipe for disaster".Reuse content