Centrica is considering making a £10bn offer for British Energy in a bid to keep it out of foreign hands, it was reported yesterday.

The owner of British Gas is likely to bill its interest as a "British solution" for the future of the Scottish-based nuclear generator, which said last week that talks with a number of companies about building nuclear power stations could lead to an offer for the group.

A Centrica spokesman declined to comment on the report, but it is known that the two companies have been in talks about the possibility of forming an alliance to build nuclear power stations since British Energy launched the initiative a year ago.

The UK government is understood to have approached Centrica, as well as a raft of foreign-owned utilities, about the possible sale of its 35% stake in the nuclear group.

Ministers, who have the right to prevent anyone buying a stake of more than 15% in British Energy, are said to have promised Centrica that they would not exercise their veto over a potential offer for the company - but this applies equally to the European energy giants RWE, E.ON, EdF and Iberdrola, who are the other potential buyers.

Meanwhile, EdF, the state-owned French utility, is drawing up plans to merge its UK energy subsidiaries if it secures one of Europe's biggest-ever takeover deals. EdF is said to be circling Iberdrola, owner of ScottishPower, as part of a 70bn (£54.5bn) consolidation of the European utility sector.

EdF is in talks about an alliance with Spanish construction group ACS, which would see the duo make simultaneous bids for Iberdrola and Spain's third-largest supplier, Union Fenosa.

Under the deal, ACS would acquire all of Iberdrola, which has a market value of 50bn, and break it up, with ScottishPower sold on to EdF. ACS already holds a 13% stake in Iberdrola and a 45% stake in Fenosa.

Iberdrola recently expanded the responsibilities of ScottishPower chief executive and group strategy head José Luis del Valle, potentially creating another period of management instability for the Glasgow-based company.

French President Nicolas Sarkozy said last week he was in close contact with the Spanish government to discuss energy issues and that the two nations were trying to find "consensual solutions".

The plans also coincided with a weekend meeting in London between Sarkozy and Prime Minister Gordon Brown at which the building of the UK's new nuclear power stations was on the agenda.