The UK's biggest electricity generator British Energy has entered urgent talks with the government to try to prevent it collapsing.

On Thursday night the company - which runs the UK's nuclear power stations - warned that it faced insolvency unless immediate financial help was found.

There's no question at all of taxpayers writing a blank cheque

Patricia Hewitt Trade & Industry Secretary

It is thought that the talks will continue over the next few days and in a statement, the company said it had reasonable grounds for believing the discussions would be successful.

But it warned shareholders: "There can be no certainty that this will preserve value for investors."

The company said that if the talks failed British Energy might be unable to meet its financial obligations and could face insolvency.

'No alternative'

The Trade and Industry Secretary Patricia Hewitt told BBC News: "There's no question at all of taxpayers writing a blank cheque to British Energy and its shareholders."

She said the only reason she was getting involved in discussions with British Energy was because the government had a responsibility to ensure the safety of nuclear power.

Executive chairman Robin Jeffrey said: "We had no alternative other than to seek government support."

Shares suspended

British Energy was privatised in 1996 but has experienced financial problems because of falling wholesale electricity prices.

It made a loss of £500m in its latest financial year and it is heavily in debt.

The company has been lobbying for exemptions from the climate change levy or business rates to try to cut its costs.

British Energy's shares were temporarily suspended shortly before it announced that it was seeking financial help from the government.

The shares are currently worth 80.75 pence. Three years ago they were trading at more than 700p.