Outlook: BNFL float

IF BRITISH Energy was the privatisation that dare not speak its name, what disguise will they come up with when a piece of British Nuclear Fuels is sold off? Windscale only stopped being associated with that unfortunate fire after it transmogrified into the more harmless-sounding Sellafield.

On top of this, BNFL carries a thumping great millstone around its neck in the shape of "back end" liabilities for nuclear decommissioning and clean-up. The pro and anti-nuclear lobbies will still be arguing over whether the undiscounted figure is pounds 27bn or pounds 40bn when hell freezes over, but there is no denying it is a big number.

The sale of BNFL was part of the mixed bag that Stephen Byers inherited when Peter Mandelson made his unscheduled exit from government. Rather than dropping it like a hot reactor rod, he has persevered and now stands on the brink of announcing a sell off.

However, unlike British Energy, which at least produces a product everyone wants, BNFL leaves behind only highly radioactive waste. As an investment proposition, it is not the easiest of industries to promote. And yet the privatisation of British Energy has proved a fabulous success at least in stock market terms, which suggests there is no fundamental reason why the same ought not or cannot be done with BNFL.

The acquisition of Westinghouse's nuclear arm by BNFL last year demonstrated that this is an international business which may be best suited to private sector operation. Freed from the dead hand of state control, BNFL reckons it can even turn its recently inherited Magnox stations into money spinners and take a slice out of the decommissioning liabilities it inherited.

KPMG has advised HMG that a 49 per cent sale is feasible but Mr Byers now has to find some clever investment bankers to tell him how it can be done. The City's ingenuity is legion but this will remain one of the toughest selling jobs it has ever taken on.