EDF is edging closer to clinching an £11 billion takeover of British Energy as it emerged last night that Centrica had resumed talks with the French company to buy a stake of up to 25 per cent if the deal proceeds.

Advisers said that the discussions between EDF and British Energy were much more positive and expressed growing optimism that the deal would be done, despite continued wrangling over price.

They added that the falling global price of crude oil was helping to soothe earlier differences over the valuation of British Energy, the UK's main nuclear generator.

A group of hardline shareholders have argued that soaring wholesale energy prices justified a far higher valuation than the estimated 685p per share offer that was initially tabled in May by EDF, which is controlled by the French Government.

“[A deal] is not going to happen this week but it's getting closer,” one adviser said. Another source said the deal could be completed by the end of the month.

The Times has learnt that Centrica and EDF have held detailed talks in recent days about a side-deal in which Centrica would buy a 20 to 25 per cent equity stake in British Energy from EDF after the initial takeover deal has been completed.

The arrangement would allow EDF to cut its outlay by up to £3 billion while gaining access to a string of sites to build new nuclear plants in Britain.

Centrica, the owner of British Gas, would gain access to power plants to help to hedge its exposure to wholesale energy prices as well as valuable nuclear experience, which it currently lacks.

EDF's previous offer to buy British Energy was rebuffed but in the absence of any other suitor the two sides have continued negotiations.

In a further sign that the discussions have been stepped up, British Energy, which is 35 per cent owned by the Government, has bolstered its advisory team with the appointment of Gleacher Shacklock, the boutique investment bank.

The future of British Energy is critical to the Government's plans to build a new generation of nuclear power plants in the UK because most of them are expected to be located on, or adjacent to, existing nuclear sites. EDF wants to build four new nuclear power stations in Britain using French reactors produced by Areva.

Other potential bidders for British Energy, including Iberdrola of Spain, the owner of Scottish Power, and RWE of Germany, npower's owner, have ruled themselves out of the race.

British Energy's board, led by Sir Adrian Montague, has insisted that the company could if necessary revert to discussions about a series of joint ventures to build the new power stations. Centrica and EDF declined comment on the talks.

British Energy's eight ageing nuclear and one coal-fired power stations generate one sixth of Britain's electricity. However, much of the group's value is thought to be locked up in its ownership of most of the preferred sites for new stations, including Sizewell, Dungeness and Hinkley Point. Some analysts have claimed the company could be worth as much as £11 per share.

Separately, Centrica said yesterday that it would double its holding in SPE, the Belgian generation and supply company, to 51 per cent for €515 million ($820 million).

— Oil prices slipped to six-week lows yesterday, extending a two-week slide from a record peak of $147 a barrel on July 11. United States crude prices fell $2.12 to $126.30 a barrel while London Brent crude fell $4.26 to $125.29 a barrel.

The decline came after the publication of a report by the American Government indicating weaker energy demand in the US, the world's largest oil consumer.

Figures from the US Energy Information Administration pointed to an unexpectedly large increase in domestic petrol stockpiles last week. Hurricane Dolly, which came ashore in Texas yesterday, shut a relatively modest 5 per cent of US production from the Gulf of Mexico.

Times Recommends

• Interest rate setters split for second month in a row
• BAA under pressure to sell three UK airports
• Investors fear inflation and financial upheaval