State-owned nuclear fuels giant BNFL is widely expected to report a record loss on Tuesday.

Weekend newspapers suggest the company could fall into the red by as much as �2bn, the largest loss in the company's history.

The figure reflects the cost of cleaning up Britain's radioactive sites as well as the cost of closing some reactors.

Last month, the government unveiled proposals to create a separate agency to take on these clean- up costs - effectively passing the costs onto the taxpayer.

The creation of this agency was seen as a first step towards the sale of the company, and BNFL is likely to claim that if these one-off costs are stripped out, then the company's performance has improved.

Clean-up costs

The estimated costs of decommissioning old nuclear plants and storing radioactive waste continue to grow.

As of March this year, the total estimated cost was �47.9bn, up sharply from a previous estimate of �35bn.

The latest estimate covers decommissioning and demolition of aging plants, processing, storage and disposal of nuclear waste and environmental restoration.

"Nuclear clean up is one of the most important technical and environmental challenges facing the UK," energy minister Brian Wilson said in a statement to parliament, when he unveiled proposals for the Liabilities Management Agency (LMA).

Crucially for BNFL and the government, ring-fencing the company's liabilities in this way should make it more attractive to potential buyers.

BNFL missed out on the last wave of nuclear privatisation.

Some of its Magnox plants are old and expensive to run, and as such it was deemed better that they were kept in state hands when the rest of the industry was sold in 1996.