THE £3 billion clean-up of the defunct nuclear complex at Dounreay in Caithness is facing prolonged delays and the loss of up to 500 jobs because of a government financial crisis.

THE £3 billion clean-up of the defunct nuclear complex at Dounreay in Caithness is facing prolonged delays and the loss of up to 500 jobs because of a government financial crisis.

The Nuclear Decommissioning Authority (NDA), the agency that funds the dismantling of all the UK's nuclear plants, has a shortfall of £450 million. As a result, Dounreay could see its budget cut by £40 million in 2007-08, drastically reducing the sum available for spending on decommissioning.

That would mean the postponement of a series of projects vital for making Dounreay safe, including the emptying of the shoreline radioactive waste shaft which exploded in 1977. Officials fear the date for finishing the site clean-up - 2033 - may be pushed back "several years".

They also said the 2000-strong workforce of staff and contractors at Dounreay could be reduced by between 200 and 500. Staff at Dounreay have reacted with "absolute disbelief and anger", said Ian Clark, the trade union co-ordinator for the site's operator, the UK Atomic Energy Authority (UKAEA).

The funding shortfall has arisen as the NDA's income from operating nuclear plants has been much lower than expected. A reprocessing plant at Sellafield has been closed because of a leak, and a plutonium fuel plant and ageing reactors are performing badly. The NDA relies on these plants to provide half of its £2bn annual budget.

The NDA is understood to have asked the Treasury for an extra £290m. But it is also telling contractors, such as the UKAEA, to cut £160m from their clean-up programmes. Dounreay has been required to make cuts of nearly £6m by the end of March. The site had planned for a budget of £170m in 2007-08, but now staff fear this may be reduced to £130m.

Cutbacks are also being required at Hunterston A in North Ayrshire, and Chapelcross, near Annan, in Dumfries and Galloway.