Shares in British Energy continued to climb yesterday as speculation mounted that France's EDF and Germany's RWE had approached Scottish Gas owner Centrica about a possible joint bid for the nuclear power operator.

Livingston-based British Energy, which operates eight nuclear power stations, has seen its share price jump 30% during the past month amid hopes of a takeover approach.

The latest speculation revolved around reports that foreign utility groups - led by EDF and RWE - had approached Centrica about a £10bn joint bid, a move that offered a "British-led solution" to the future of British Energy.

Shares in British Energy yesterday rose a further 8.5p, 1.2%, to 719.5p.

Centrica shares have fallen this year, but surged 4.5% yesterday to 317.5p amid signs the British Gas owner could take its first step into nuclear generation. The company's hopes of bidding on its own have been frustrated by its lack of financial firepower and weak share price. It is now being courted by European firms as Centrica's involvement would water down criticisms of strategic industries going to foreign owners. A Centrica spokesman declined to comment on the speculation yesterday.

Nonetheless, any takeover proposal would involve buying the government's 35% holding as well as the company's listed majority stake.

In addition to its financial handicap, Centrica's lack of expertise in the nuclear industry may encourage the government to consider an approach from the likes of EDF.

The French firm operates 19 nuclear sites in France, where it supplies more than 80% of the country's power needs.

The group also has extensive operations across Europe, with UK arm EDF Energy boasting 5.1 million gas and electricity customers.

It was reported on Friday that EDF's directors had given the green light to proceed with an offer for the company.

Any takeover of British Energy may see EDF forced to sell some of its British assets to avoid the UK's nuclear capacity being in the hands of a single overseas business. British Energy's eight nuclear power stations are Dungeness B in Kent, Hartlepool, Heysham 1 and 2 in Lancashire, Hinkley Point B in Somerset, Hunterston B in Ayrshire, Sizewell B in Suffolk and Torness in East Lothian. No new nuclear power plants have been built in the UK since Sizewell B, which opened in 1994. Decommissioning dates for the group's nuclear sites range between 2014 and 2035.

British Energy also owns a coal-fired power station at Eggborough, East Yorkshire.

Last month, Business Secretary John Hutton said the UK must "significantly expand" its nuclear power production for the sake of national security and combating climate change.

The government sold a 25% stake in British Energy last year, raising £2.08bn, and is now considering selling its remaining stake in the group.

The business needed a government bail-out six years ago when it was squeezed by a sharp drop in electricity prices.