We have to face up to our responsibilities and not leave them to future generations

Patricia Hewitt Trade Secretary

Announcing the plans to MPs, Trade and Industry Secretary Patricia Hewitt said the move marked a new approach to the issue of nuclear waste.

The target for British Nuclear Fuels Limited (BNFL) remained partial privatisation, said Ms Hewitt, and the scope for that would be reviewed in 2004-5.

Last year those public-private partnership plans were put on hold until at least 2002 by the government.

Ms Hewitt said the new arrangements would allow BNFL staff to build on progress already made in turning around the company.

Liabilities legacy

The trade secretary said the clean-up costs were expected to total �1bn a year over the next 10 to 15 years, but said the plans would not affect public finances.

Instead BNFL assets already earmarked for clean-up will be transferred to the new authority.

Two thirds of the liabilities for the new authority lie at the Sellafield plant in Cumbria.

The legacy of waste and old facilties came mostly from the early years of British nuclear work in the 1940s and 1950s, said Ms Hewitt.

"We have to face up to our responsibilities and not leave them to future generations," she continued.

Ms Hewitt made her announcement in the Commons

As well as taking BNFL's �35bn liablities, the LMA will be responsible for another �7bn currently held by the UK Atomic Energy Authority.

The move is expected to mean that, shorn of most its liabilities, BNFL can concentrate on its business operations: nuclear fuel manufacture, fuel reprocessing, clean-up and Magnox generation.

The news follows recent criticism of the company's safety record, amid calls for the closure of its Sellafield plant.

The company's safety record had raised doubts over whether it should run the Aldermaston atomic weapons factory, as previously agreed.

But on Wednesday, the Ministry of Defence gave a BNFL-led consortium the go-ahead to run Aldermaston.

Safety scares

In recent months, BNFL has been hit by a series of safety scares.

Last year, it admitted that staff at its Sellafield plant faked safety records.

The false records were discovered when a shipment of BNFL's reprocessed fuel reached Japan last October.

The company has also come under fire from Ireland and Denmark to close its Sellafield plant.

The government had hoped to raise up to �1.5bn by selling off up to 49% of the company next year.

But industry minister Helen Liddell stressed that it was important that BNFL respond "positively to the HSE's (Health and Safety Executive) reports on the Sellafield site".

Safety progress

On Wednesday, Ms Hewitt said BNFL had met all the recommendations of two of the three HSE reports, as well as making "solid progress on the third".

BNFL is one of the world's biggest suppliers of nuclear services and has an annual turnover of about �2bn.

Nearly half of this comes from fuel manufacture and reactor servicing, which have emerged unscathed from the safety expectations.

About one quarter of the company's work involves the operation of Magnox nuclear power stations in the UK.