---

Nuclear Decommissioning Authority/British Nuclear Group

I have this week written to the Nuclear Decommissioning Authority, to confirm that I have approved its first strategy. Full details will be provided by the NDA when it publishes the strategy later today. After carefully considering the views of key stakeholders, including the NDA, the regulators and the unions, I have also agreed the recommendation of the BNFL board that it should sell British Nuclear Group through a competitive sale process. The process will coincide with the letting by the NDA of a new five-year contract for Sellafield and is in line with their strategy to develop a competitive market in decommissioning and bring in private sector expertise to improve performance. BNFL and the NDA will therefore work in close co-operation, with the aim of ensuring that the successful bidder is the best available to improve performance, particularly at Sellafield. I would expect the sale to be completed by autumn 2007. I firmly believe that a competitive sale is in BNFL's best commercial interest and represents British Nuclear Group's best chance of operating successfully in the commercial market created by the Energy Act 2004. Bringing in external expertise more quickly contributes to improved clean-up performance for the NDA and is therefore good for the tax payer. BNFL will be holding media briefings later today to provide fuller details.