Greenpeace said it expected the EU executive Commission to open a formal investigation on Wednesday into the agency, which will from next April assume all the assets and liabilities of state-owned nuclear firm British Nuclear Fuels (BNFL).

"On 1st April, 2005, all of British Nuclear Fuel's assets -- including reprocessing and fuel fabrication plants, the Magnox reactors and the Drigg radioactive waste dump -- are due to be transferred to the ownership of the NDA," the organisation said in a statement.

"It is the transfer of assets from BNFL to the NDA, and how commercial operations may be helped by state aid, which will be main focus of the (Commission) investigation," Greenpeace said.

Commission spokesman Jonathan Todd confirmed the matter was on the agenda for Wednesday's Commission meeting, but declined to give further details.

With certain exceptions, EU law forbids state aid -- government subsidies to companies or other preferential treatment -- on the grounds that it distorts competition and the free flow of goods and services in the 25-nation bloc.

A spokeswoman for Britain's Department of Trade and Industry said the government would avoid state aid issues by ensuring that only existing decommissioning funds were used for the agency and no benefit was conferred on BNFL.

"The government supports state aid rules and accepts Commission responsibilities under them," said spokeswoman Eurwen Thomas.

"We won't be surprised if an investigation is launched," Thomas added. "(The) government is ready for this and is preparing interim arrangements to ensure the NDA can start its essential decommissioning work as planned on 1 April 2005."

Britain's biggest power producer, the debt-laden British Energy, will also turn over its funds for decommissioning to the agency. But because its power stations are newer, the agency will not have to decommission British Energy plants for years.