Spanish power firm Iberdrola is in talks with British Energy over a possible partnership to build new nuclear plants in Britain, industry sources said on Wednesday.
Britain is close to deciding whether to back a new generation of nuclear plants, which would boost the global industry as it recovers from the 1986 explosion at Chernobyl.
British Energy says it is in second round talks with more than 10 different parties about building new reactors if given the go-ahead by government, but it has named none of them.
"It's Iberdrola, not its U.K. division Scottish Power, that's in talks with British Energy," said one of the two sources. "It's really very early discussions."
The U.K. government is close to deciding on the plants, which would help it meet EU-wide goals of cutting CO2 emissions 20% below 1990 levels by 2020.
It is also keen to cut the country's reliance on foreign energy imports, but wants any new plants to be funded by the private sector rather than the U.K. taxpayer.
Reactors could be built by 2017, but workforce constraints would likely limit the first wave of construction to two units, British Energy says.
Iberdrola has been expanding rapidly over the last months and prides itself on a huge pipeline of environmentally friendly energy power production, much of it acquired when it bought Scottish Power earlier this year.
Iberdrola owns, or has a stake in, most of Spain's nine nuclear power stations but their future is in doubt as the Madrid government struggles to decide whether to allow new plants to be built when the current ones are decommissioned.
Shares in the group were up by 2.1% at 41.1 euros, while British Energy shares were up 2.2% at 515.5 pence.
Germany's E.ON and RWE, France's EDF and Britain's Centrica and Scottish and Southern Energy have all previously been reported to be interested in partnering with British Energy.
Both British Energy and Iberdrola declined to comment.
The British public are divided on whether companies should have the option to build more nuclear plants, according to the results of a public consultation published by the government this month.
Forty-four percent of the 1,000 people consulted across the country said it would be in the public interest to give companies the option of investing in new nuclear power stations, while 37 disagreed and 18% sat on the fence.