The future ownership of Dungeness B nuclear power station was plunged into uncertainty today with the surprise stalling of an expected French takeover of British Energy.

Electricite de France (EDF) announced in the early hours of this morning that it was pulling out of the proposed £12 billion deal.

It said that "after in depth discussions, it considers that the conditions for a major development in Great Britain are not met to date." British Energy’s shares fell almost 6pc to 688p in early trading.

The announcement shocked energy experts and cast a cloud over the Government’s nuclear power strategy.

It is understood British Energy chiefs wanted more money than the French energy giant was prepared to offer.

In a statement, British Energy said today: "Further to the announcement made on 24 July 2008, advanced discussions with a party have continued but without agreement to date. A further announcement will be made in due course. There can be no certainty that the discussions will lead to an offer being made for British Energy Group plc."

Any deal would affect 570 British Energy workers in Kent, out of a total national workforce of more than 6,000.

Centrica, the owner of British Gas, was expected to take a 25 per cent stake in the deal, although a proposal by the Government to slap a windfall tax on energy companies may have given them cold feet.

British Energy owns and operates the advanced gas-cooled reactor on the Kent coast, and seven other nuclear power stations across the UK.