Focus: Is this Sellafield's last chance? right

There is a terrible beauty about the scene. Deep in the heart of Sellafield, on the edge of the Lake District, stands a vast artificial lagoon - big enough to float a liner - full of shimmering turquoise water. Sunk in it is some of the most dangerous and controversial material on the planet.

Some 650 tons of used nuclear fuel - in more than 300,000 slender, powder- grey rods, each about nine feet long and half an inch thick - lies in containers, shielded by the water from the outside world. Each radioactive enough to deliver a fatal dose in less than two seconds, the rods have been waiting to be "reprocessed" at the Cumbrian nuclear complex. But last week they were at the heart of an extraordinary international drama, tinged with nuclear blackmail, that has left the world's greenest cabinet minister looking distinctly blue.

Jurgen Trittin, the new German environment minister, is a Green from the fundamentalist wing of the party, who went canvassing by bicycle, wearing shorts, sneakers and a T-shirt bearing a smiley face. Ten days ago he was stalking confidently into the offices of British ministers, moustache bristling, resplendent in a natty three-piece suit to deliver an ultimatum.

Sellafield, he said, must stop reprocessing the fuel rods, and Germany was going to stop sending them there. This threatened to deal the complex a fatal blow, as Germany is its second biggest foreign customer. But this weekend Mr Trittin is in retreat. The German Chancellor, Gerhard Schroder - who fully backed Trittin's mission - last week abruptly withdrew his support, plunging his coalition into crisis.

The U-turn happened because Stephen Byers, Britain's new Trade and Industry Secretary, told Trittin that he would send the fuel rods - 35 trainloads of them - straight back to Germany. "I think," he later boasted, "that that concentrated his mind somewhat."

No doubt it did. Two years ago, protests by Mr Trittin's Greens against just one trainload of nuclear materials on a relatively minor journey through Germany prompted the biggest mobilisation of troops in the country since the Second World War. There is nowhere to put the rods in Germany, and if they are returned to its nuclear power plants they will have to close, putting thousands out of work.

THIS WAS too much for Mr Schroder. He scrapped a law due to be introduced last week, which would have ended Germany's business with Sellafield on 1 January next year, in favour of a more gradual phase out.

Round one, then, to Sellafield and its friends in the Government. But, as British Nuclear Fuels (BNFL), which owns the complex, admits, a serious threat remains. It is unlikely to win the long-term battle. And, ironically, the best bet for Sellafield's survival and prosperity - and for its thousands of jobs - lies in the kind of deal that Mr Trittin was proposing, one that presents Mr Byers and the Deputy Prime Minister, John Prescott, with a particularly interesting challenge.

But first back to basics. As nuclear fuel, made of uranium, powers a reactor, some of it turns into plutonium and highly radioactive wastes. Reprocessing separates out the remaining uranium, the plutonium and the wastes. The uranium and the plutonium - just a single gram of which contains as much energy as a ton of oil - were supposed to be used again in fast breeder reactors. These apparently magical reactors, which would produce more useable fuel than they burned, were to be the crowning glory of the nuclear age.

There was just one prob- lem: they didn't work. Britain scrapped its fast breeder programme in 1994 after spending pounds 4bn - and with it any justification for reprocessing.

Uranium, it was once thought, would become scarce as nuclear power expanded: but the expansion never came, and huge deposits were found around the globe. The world is also awash with plutonium that nobody wants, both from civil reprocessing and old nuclear warheads. And reprocessing actually increases the volume of nuclear waste and makes it harder to dispose of. It would be much cheaper, safer, much less polluting - and infinitely more sensible - to dispose of the used fuel in the first place.

All this was obvious more than 20 years ago. The United States stopped reprocessing in 1977, and tried to persuade Britain to do the same. But BNFL built Sellafield's Thermal Oxide Reprocessing Plant (Thorp). It is taller than St Paul's, twice the size of the Wembley Stadium, cost pounds 2.8bn - and it does not work properly.

Hit by repeated accidents - one of which closed it for five months last year - it will achieve only just over half of its planned throughput in its first five years of operation. Independent analysts are sure it is losing money, though BNFL denies it. Sellafield's reprocessing has suffered repeated potentially fatal blows, but still it staggers on. The discipline guiding it appears to be not economics, nor even science, but theology - a faith in the technology for its own sake.

This extends into the highest reaches of the Government. Belief in the "white heat of the technological revolution" is an abiding trait in parts of Old, and now, it seems, New Labour. Tony Benn launched Thorp: Tony Blair is one of its staunchest defenders. So is Peter Mandelson, whose grandfather, Herbert Morrison, was one of the few ministers who took the secret decision to establish the complex.

Friends say that Stephen Byers is less dogmatic and prepared not to be dominated by his fiercely pro-reprocessing officials. And Mr Prescott, who has not yet shown his hand, but who is concerned both to safeguard jobs in an area of high unemployment and to cut down pollution from the site, could be another key to a prosperous solution.

FOR REPROCESSING is dying. Despite last week, Germany still wants out, "as soon as possible" to quote Mr Schroder. Britain's nuclear power industry - Thorp's second biggest customer - though publicly supportive, would, privately, be glad to be rid of it. And even Japan, the biggest customer of all, is unlikely to continue in the long term. At best, Thorp has another 10 years.

The future, as Mr Byers himself hinted last week, is in storing used reactor fuel, without reprocessing it, and in preparing it for disposal. This offers enormous business - and BNFL is a leader in the technology. It has acquired one of the world's largest manufacturers of the storage flasks, renaming it BNFL Fuel Solutions. The work would be much more profitable and secure, and would employ far more people, than reprocessing. And it would be uncontroversial. Pete Roche, Greenpeace's nuclear campaigner, admits: "We would end up being one of Sellafield's greatest friends, instead of its deadliest enemy."

Mr Trittin - who surprised ministers with his moderation - was offering just such a deal. Sellafield could keep the money Germany was going to pay for reprocessing and prepare its used fuel for storage. Then BNFL could bid for building German stores. The offer is still on the table. So, if Mr Byers and Mr Prescott seize the opportunity, the fundamentalist Green in the three-piece suit could yet be Sellafield's unlikely saviour.