British Energy is likely to fall into French hands next week after the nuclear generator said it was in �advanced discussions� about a £12bn takeover.

British Energy is likely to fall into French hands next week after the nuclear generator said it was in "advanced discussions" about a £12bn takeover.

Shares in the Scottish-headquartered utility jumped 6%, after the company confirmed to stock market investors that it was in talks with an unnamed party.

Insisting there was no certainty that the talks could result in an offer ,the com-pany declined to shed light on the identity of the bidder.

However, sources said the talks involved Electricite de France, the French giant, and were expected to conclude in a deal being agreed before or just after the bidder's first-half results on August 1.

One person close to the discussions said last month that EdF had agreed with Centrica for the British Gas owner to take a minority stake in the firm should a takeover be agreed. Both EdF and Centrica declined to comment yesterday.

Confirmation of any deal would bring an end to months of uncertainty about the future ownership of British Energy, in which the government formerly held a controlling stake. It has been keen to sell this down to raise funds.

Last year, the government sold a 25% stake, reducing its shareholding to 35%, and used the £2.1bn proceeds to help fund the decommissioning of the firm's existing power plants. These are due to be decommissioned between 2014 and 2035.

While uncertainty affecting the prospects for the controversial industry had long weighed on British Energy shares, the appeal of the company received a huge boost earlier this year when ministers gave the go-ahead to a new generation of nuclear power stations.

British Energy owns eight nuclear plants plants, including Hunterston in Ayrshire and Torness in East Lothian, all of which have land around them which owners might want to use for new building. It also owns a coal-fired plant, and is the largest producer of electricity in the UK.

Analysts have suggested that Germany's RWE and Spain's Iberdrola also could be interested in the company.

However, valuing the firm has been complicated by a surge in power prices this year.

Although British Energy held talks with many of Europe's largest utilities, EdF has been considered the front runner because of its experience in building and running nuclear power plants.

The French company has said it wants to build several new nuclear reactors in Britain, where it has a large subsidiary called EdF Energy.

Only EdF is believed to have come through with an offer. Industry sources said Centrica put forward an all-share merger proposal earlier in the year, but it was rejected due to the absence of cash in the offer.

Any sale of the company would be regarded with mixed feelings in Scotland, which has lost a series of corporate headquarters as a result of takeovers in recent years. Around 200 staff are employed at the corporate headquarters in East Kilbride.

A takeover would cement a dramatic transformation in the fortunes of the company which has resulted from the boom in demand for power encouraged by the rise of China and India.

British Energy was privatised in 1996, but a government bail-out was approved in 2005 after lower power prices led the company to report it faced insolvency.

Shares in British Energy closed up 42.5p at 728.5p.