French company Electricite de France (EDF) yesterday became the latest utility giant to be associated with a bid for British Energy, but is thought to be considering an offer below the 700p price its rivals have put on the company.

Shares in Livingston-based British Energy barely moved yesterday, closing up just 1.5p at 741p. This is still well above the price any bidder is thought to be considering and a massive increase since the beginning of the year, when they were trading as low as 476p.

Companies from across Europe are circling British Energy, which owns eight of the UK's 10 nuclear power stations, after the government signalled it wanted to sell its remaining 35% stake in the company.

British Energy is attractive to cash-rich utilities seeking to put their money to work in part because it generates about a sixth of the UK's electricity.

But even more significantly, the government has said it wants a new generation of nuclear power stations built. These would be situated next to existing plants.

While EDF is thought to be deciding between a bid for the whole of British Energy or just the UK Government's stake, Germany's RWE has made a bid proposal of just under 700p a share in cash for the whole company, valuing it at about £11bn, and Centrica, which is behind British Gas and Scottish Gas has proposed an all-share deal at a similar level.

Centrica, which has a very strong position in in the distribution market, is thought to be keen to hedge its exposure by increasing its supply side capabilities.

However, some investors still think it is more likely to acquire a gas asset.

It has also been mooted that Centrica might partner either RWE or EDF in making an offer for British Energy. This would reduce concerns about foreign control of a key UK energy asset.

Other companies thought to be in discussions about their stake are Spain's Iberdrola, which owns ScottishPower, and E.ON of Germany. Scottish & Southern Energy is also participating although it is thought to be among the least likely to table an offer.

The surge in British Energy's share price in recent weeks will be a boon for fund managers who have invested heavily in the stock. This includes Edinburgh-based fund manager Derek Stuart of Artemis, who ranks it among the key overweights in his Special Situations portfolio, and Neil Woodford of Invesco Perpetual, who holds it as one of the biggest stocks in his Higher Income fund.

However, the company is also viewed with some suspicion by many investors. In part this is because it had to be rescued by the government in 2002, only six years after it was privatised, when it almost collapsed amid falling power prices.

A succession of technical problems has also dented confidence. Cracks at its Hunterston power station in Ayrshire and its Hinkley Point site in Somerset caused outages, knocking profits last year. It has also had problems at its Hartlepool plant and at Heysham in Lancashire.