The cost of decommissioning Britain's ageing nuclear power sites has risen from an estimated £61bn in 2005 to £73bn as the "start-stop" nature of the work is creating significant uncertainty for contractors, Whitehall's value-for-money watchdog reveals today.

The report by the National Audit Office (NAO) into the Nuclear Decommissioning Authority will prove particularly uneasy reading for Prime Minister Gordon Brown, who earlier this month gave the green light to a new generation of nuclear power stations - albeit that none will be built in Scotland because of the anti-nuclear stance adopted by the Scottish Government.

As well as reporting to the UK Government via the Department for Business, the authority also reports to Scottish ministers who agree its strategy and plans for sites in Scotland. By December 2007, 14 of 19 facilities across Britain had already shut down and were in the process of being decommissioned, which includes cleaning up the sites.

The NAO says that while the authority had made progress, it faces "significant challenges" if it is to make a step-change in decommissioning Britain's nuclear sites, which include the largest at Sellafield, 11 Magnox power stations such as Chapelcross in Dumfries and Galloway and Hunterston A in Ayrshire, and four research reactor sites, including Dounreay on the north-east coast of Scotland.

Estimated costs of decommissioning "continue to rise rapidly", says the report, even for the most imminent of work, which might have been expected to have stabilised.

The report adds: "Progress at some decommissioning sites has been hampered by changes at short notice to funds available, bringing uncertainty for sites and lessening value for money.

The authority needs to develop its approach to contracting for decommissioning, if it is to secure value-for-money in the long run for the taxpayer."

The report found that the nature and scale of the decommissioning task inherited by the authority in 2005 was highly uncertain. Many of the authority's sites had not been designed with decommissioning in mind. Record-keeping, particularly in the early days of nuclear development, had not always been sufficiently detailed to inform decommissioning several decades later.

The NAO found that the authority had put a lot of work into defining what needed to be done but noted how plans for the decommissioning of individual sites had gone through a number of changes with cost estimates having "increased significantly".

"In 2007, the authority estimated that the undiscounted cost of decommissioning its 19 sites over a 100-year period was £61bn and that it would cost a further £12bn to run operating sites to the end of their commercial life.

This total lifetime cost of £73bn was almost £12bn - 18% - higher than the 2005 estimate," explains the report, which stresses how estimating decommissioning costs had to be interpreted with great caution. However, the 2007 estimate is almost £17bn or 30% higher than that given in 2003.

Sellafield is expected to cost around £46bn, some 63% of the total lifetime costs, with Dounreay due to be the next largest at around £4bn or 5%.

The report notes that the Scottish Government's policy is to support "interim near-site surface storage of higher- activity radioactive wastes".

There was a repository for disposing of low-level waste, such as protective clothing, near Drigg in Cumbria and there were plans for a facility at Dounreay to take low-level waste from the Caithness site.

The Dounreay Cementation Plant was shut down in September 2005 after there was a spillage of cement powder and radioactive liquid. The plant is due to reopen this spring.

The report says that the authority intended to focus its decommissioning resources increasingly on the high- hazard facilities at Sellafield and Dounreay.