Speculation is mounting that BNFL will sell its US nuclear engineering arm Westinghouse for around £1 billion ($1.82 billion).

Government-owned BNFL, which acquired Westinghouse five years ago, is thought to be under pressure from the Treasury to part with the group. The sale of Westinghouse would technically be the start of the break-up of BNFL.

Conversely, BNFL is said to want to delay any such sale for at least a year in the hope of raising more cash from the sale on the back of a widely anticipated nuclear renaissance. The move comes as the prospect of building new nuclear reactors is growing with the threat of global warming and rising fuel costs. Pittsburgh-based Westinghouse is already bidding for a Chinese government contract to build four nuclear reactors, a bid which includes some $5 billion in loans and other financing from the US Exim Bank.

With GE, the world’s largest company, expected to be a front runner in any attempt to acquire the group, others expected to have an interest are private equity outfit Cerberus, headed by former US vice president Dan Quayle, and Areva, the state-owned French company.

BNFL is expecting to receive board approval at the end of this month to sell its US business.