BBC News Online looks at what has gone wrong.

Is this another Railtrack fiasco in the making?

There are certainly some similarities.

It is another privatised company going to the government and begging for money to save it from insolvency.

And once again the government seems to have got rid of a state-owned company without getting rid of its responsibility for that business.

Also, any rescue package would be organised by the Department of Trade & Industry.

But this is very different from the Railtrack situation.

Oh really?

Yes. You could argue that many of Railtrack's problems were simply down to bad management.

But the reason British Energy is losing so much money is that the price of electricity on the wholesale market has dropped 40% in the past four years.

It is costing more for the company to produce electricity than to sell it in the marketplace.

The sums just do not add up.

Why has the price of electricity fallen so much?

It is because the market was opened up to competition after years of inefficiency and price-rigging.

There was too much electricity available and with more companies vying to sell the electricity the price was forced down.

Competition also exposed the fact that many of the plants being operated were uneconomic.

Julian Sinclair, a fund manager from Gartmore, said it was not just a problem for the electricity industry.

"It happens in many industries where competition is opened up and so many people come into the industry that... supply exceeds demand and prices fall and players have to exit again."

So British Energy is not the only one with problems then?

No, it is not alone. All of the electricity generating companies are struggling to make money at the moment.

Some generators have switched off plant while others have defaulted on debt repayments and one has gone bust.

But British Energy's problems are more serious than those of its peers because it is a nuclear producer.

That means it cannot simply switch off generators when prices fall.

Big rivals such as Scottish Power and PowerGen also deliver power to end-users who pay the full price for electricity. That cushions them from the effect of a fall in wholesale prices.

British Energy does not have a retail arm.

Could the lights go out then?

That is something the government will do all it can to avoid.

But even if British Energy gets short-term financial help it still needs to sort out its long-term future.

At the moment there is no money and little incentive to build new power stations.

So imagine if, in say 20 years time, British Energy's nuclear reactors reach the end of their lives but there are no replacements to fill the gap.

With British Energy supplying a quarter of the country's electricity that would leave a very big hole in the electricity grid.

If there really was no alternative the lights would go out all over the UK - just like they did in California in 2000 and early last year.

How we can stop that happening?

The very question British Energy and the government will be asking each other during their discussions.

British Energy says it needs government cash for its immediate survival.

It says it has been driven to this because its lobbying for relief from business rates and the climate change levy has achieved nothing.

The government says there is no question of taxpayers handing a blank cheque to British Energy.

But we are talking about a nuclear power company and the government has said it is taking part in the discussions because it has a responsibility for the safety of nuclear power.

What about the shareholders?

It looks like one of those investments where shares can go down as well as further down.

The shares were worth 80.75 pence when British Energy announced it was appealing to the government for help.

Three years ago they were trading at more than 700p.

Ed Warner of Old Mutual Financial Services says that investors cannot really expect to be left with very much.