A source close to the situation said EC officials could next week give the go-ahead for the nuc- lear power generator's rescue package. However, approval would mean disregarding the concerns of Polygon, the group's rebel shareholder.

EC officials were due to meet Polygon this week to discuss its proposals for an alternative restructuring. Polygon, a US hedge fund, has been pressing for other options to be explored since it acquired a stake for a knock-down price in July.

East Kilbride-based British Energy was brought to the brink of insolvency by falling wholesale electricity prices. Unless shareholders approve the restructuring, the firm has threatened to de-list its shares leaving investors with nothing.

Under the terms of the carve-up, shareholders will be left with 2.5% of the company. The government promised (pounds) 650m to avoid bankruptcy in return for 65% of its operating cashflow after restructuring in a deal which also gave banks and bondholders 97.2% of British Energy's equity. However, since the deal was cut a year ago, power prices have risen by around 30%, making British Energy a viable business again.