Operations at Sellafield and other major nuclear plants such as Sizewell and Dungeness are to be sold off to the private sector for more than £10bn under plans drawn up yesterday by the board of British Nuclear Fuels Ltd (BNFL).

American companies such as Halliburton and Fluor are seen as likely contenders in any race to take over British Nuclear Group, which is the main operating arm of the government-owned BNFL, handling nuclear generation, reprocessing and clean-up businesses. The transfer of key operations out of state hands at a time when Britain is facing an energy shortfall will generate surprise, particularly with North Sea oil and gas running down and the government edging towards a decision to proceed with a new generation of nuclear reactors. But a sell-off is likely to be approved by the government when Gordon Brown is struggling to fund his spending commitments.

Last night, the traditionally-secretive BNFL refused to confirm publicly that any definite disposal move had been made but a spokesman said: "No decision on a sale will be taken without the secretary of state, the trades unions, customers and other stakeholders being properly consulted." Industry sources said the company was determined to find a new future for BNG through a partnership with the private sector or, more likely, through an outright sale of the business which employs 8,000 staff.

The Prospect union expressed alarm at the development. "We are particularly concerned at the loss of government influence over the future direction of the British nuclear industry at a time when we face huge changes such as a major decommissioning programme and the prospect of a new building programme," said Mike Graham, north-west officer for the union who deals with BNFL.

Norman Lamb MP, the Liberal Democrat trade and industry spokesman, called for the government to clarify its position on the proposed sale, which would have implications for decision-making in the nuclear industry. BNG runs a dozen atomic sites, some with relatively new reactors such as Sizewell B in Suffolk.
 

The growing row over government pension reforms stepped up a gear yesterday following claims that the new rules will spur investors to spend £5bn tax-free on buy-to-let properties.

Pensioner groups and opposition MPs rounded on the government after a buy-to-let mortgage lender said the rule changes, which allow wealthy savers to buy holiday homes and buy-to-let properties for the first time using their pension, had proved hugely popular.

They argued the new rules, due to take effect next April, would prove a huge tax giveaway for the rich that could cost the government billions of pounds in lost tax revenues. So far the Treasury has dismissed warnings that thousands of accountants, lawyers, City bankers and other higher rate taxpayers will benefit from the rule changes and cost the exchequer up to £4bn in lost income tax.

But a survey of attitudes among financial advisers by UCB Home Loans, a subsidiary of Nationwide building society, showed that more that two thirds planned to buy a buy-to-let property using their pension and a similar number planned to recommend their clients do the same.

The lender said it believed the boost to spending on buy-to-lets would be equal to 15% of the entire buy-to-let market or between £3bn and £5bn.

Fears that officials planned to claw back some of the benefits with a tax charge on rental income from property, dramatically cutting benefits to savers, were dismissed by HM Revenue & Customs, which said the fear resulted from a mistake in official documents. Self Invested Personal Plans (Sipps) will from next year allow savers to deposit up to £215,000 into their pensions and use it to buy tax free residential property and exotic items such as fine wine, fine art and gold.

Most Sipps are sold by financial advisers and they report a surge in interest from wealthy clients over the last six months. Some estimate that total spending in Sipps could reach £12bn by the end of the next financial year.

Standard Life last week reported that savings in the first nine months of this year had already reached £1bn under the current restricted Sipp rules.

Abbey, which owns the UK's largest Sipp provider, James Hay, said the flows of money into residential property-based Sipps will be "extraordinary". Paul Bradshaw, head of Abbey's insurance and asset management division, said: "It has become the hottest topic of conversation at middle-class dinner parties. We are expecting that almost everybody with a City bonus next year will be pouring £215,000 into a Sipp." At last weekend's Property Investor Show in London, scores of exhibitors were promoting buy-to-let Sipp schemes promising "40% off" the cost of property not just in the UK but across Europe - with Cyprus and Bulgaria the current favourites - and as far afield as Shanghai and Rio de Janeiro.

Liberal Democrat treasury spokesman Chris Huhne has argued that the idea is misguided. Amendments to the Finance Bill designed to restrict buy-to-let investments were voted down by Labour MPs.