German energy company E.ON has said it may be in the running for a possible takeover of nuclear power company British Energy. British Energy has become a takeover target thanks to its struggle with rising costs, which forced the company to close a number of its plants last year.

The government, which owns 35 per cent of British Energy, is keen to see the company build more nuclear power stations in order to reduce carbon emissions. However there are government concerns that a foreign takeover could lead to UK job losses.

According to Reuters, a spokesman for E.ON said, We are keeping our options open regarding British Energy.

Last week Reuters quoted sources that said France's EDF and Germany's RWE were both considering bids worth as much as £11 billion. British company Centrica, owner of British Gas are said to have proposed an all-share deal.