Askew was speaking to Reuters by telephone from the European Nuclear Conference in Lille, northern France, just a month after British Energy's shock request for state funds.

He said he wanted a government pledge to replace ageing nuclear reactors.

"We have had between 25 and 30 percent nuclear for the last 30 years. As these facilities close over the next 10 to 15 years we should maintain that percentage. What I'd like to see is that statement," Askew said.

In addition to this, he said, nuclear power should be offered long-term contracts - possibly along the lines of the Renewables Obligation that supports the UK's wind and solar industries in an attempt to reduce carbon emissions.

Under the Renewables Obligation, retailers of power have to source a growing percentage of their supplies from renewable generation, and make up for any shortfall by paying for an exemption certificate.

The system effectively puts a floor under the price of renewable energy - and runs until 2027.

"You need to have some long-term contracts in place as opposed to just a short-term spot market that you have now," said Askew.

He said the UK's New Electricity Arrangements (NETA) system "has brought some good things," but is flawed, because it allows the natural overcapacity that an electricity market needs to weigh on prices.

British Energy's problems stem mainly from a sharp fall in wholesale prices since NETA market reforms were introduced.

Some analysts argue that the UK cannot keep the lights on or meet its carbon emissions targets without nuclear power. Anti-nuclear campaigners say the industry is costly and dangerous, and that renewables can and should make up the shortfall. Greenpeace earlier this week took its battle to block the 680 million pound ($1.06 billion) of state aid provided for British Energy last month to the UK High Court.

NUCLEAR SPLIT

Britain's nuclear industry was split in two in 1996.

The best nuclear reactors - close to a quarter of the UK's power generating capacity - were privatised as British Energy Plc.

The older Magnox stations - a type of reactor deemed unsuitable for private ownership and accounting for about five percent of UK demand - remained in state hands, along with the nuclear fuels reprocessing business based at Sellafield in northern England. This is BNFL (British Nuclear Fuels Limited).

BNFL, still lossmaking itself but increasingly focussed on new nuclear technology, now has its own privatisation plans.

The selloff blueprint is linked to a plan that will hive off its huge decommissioning and clean-up liabilities into a new Liabilities Management Authority (LMA) that will remain in state hands.

PRIVATISATION ON TRACK

Askew said this privatisation was still on track to happen "within three or four years."

BNFL is inextricably linked to British Energy through a contract to reprocess its fuel. The contract costs British Energy about 300 million pounds a year.

Talks aimed at making this less costly for the privatised firm broke up this summer without a deal - a development that was instrumental in its decision to seek government help.

Industry sources have told Reuters that BNFL's privatisation and the rehabilitation of British Energy are now issues that are just as inseparable.

Askew, who took over at the head of BNFL in 1998 after a fiasco over faulty fuel sent to Japan, would not be drawn on questions about the future of British Energy itself.