Blair aide gave me ultimatum to sign controversial uranium deal, Meacher claims

A former minister has demanded an official investigation into Downing Street's approval of a controversial nuclear fuel plant at Sellafield in Cumbria that has already cost the taxpayer £1.34bn – with little return.

Michael Meacher MP, who was environment minister under Tony Blair, said that he would be asking the National Audit Office and the House of Commons' Public Accounts Committee to investigate the economic evidence used to justify the licensing of the Sellafield Mox Plant. Despite the cost, since the plant opened it has failed to fabricate more than a tiny fraction of the uranium- plutonium mixed oxide fuel it was designed to produce for foreign customers – just 13.8 tons over 8 years compared to a projected output of 120 tonnes a year.

Mr Meacher was the minister responsible for giving the plant an operating licence in 2001 but signed the licence only after he was pressurto do so by Tony Blair's chief of staff, Jonathan Powell, who had told Mr Meacher that the former Prime Minister was adamant the "Mox fuel" plant must open.

"The effort to get the Mox plant agreed was held up by me for at least two years because I was never persuaded that Mox fuel had a commercial market. I thought the cost was exorbitant," Mr Meacher told The Independent. "I repeatedly expressed my doubts and concerns, and asked [officials] to go away and do further work.

In September 2001, Mr Meacher was attending a European conference when he received a mid-morning phone call from Mr Powell.

"It was fairly terse and straight to the point; that this had been held up for far too long, that the Prime Minister is concerned about this and that he is expecting an answer to this and wants the matter settled by 3pm that day," Mr Meacher said.

"I was being told that you pretty well have to sign up. I said that I'm not satisfied and he said that this is the Prime Minister's view and he wants the matter settled. He couldn't actually say, 'You sign this', but I knew perfectly well what he was saying."

The plant was built without a licence in 1996 under the previous Conservative government at a cost of £498m – more than the cost of the 2012 Olympic stadium. However, it did not receive an operating licence to go "live" with radioactive plutonium until 2001 after five public consultations and an economic report by independent consultants Arthur D Little. The plant has since cost a further £840m in commissioning and operating costs.

The 2001 Arthur D Little report has never been published in full on the ground of commercial confidentiality but it stated that the plant would result in a net financial benefit to the UK of more than £150m over the plant's lifetime – crucial advice that helped to convince Mr Blair to license the plant.

Once the operating licence was granted, and plutonium had been put through the plant, there was no going back on the decision. Now the plant is costing British taxpayers about £90m a year in operating costs and is undergoing a major refurbishment without any prospect of supplying the first Mox fuel consignment to Japanese customers until at least the end of the decade – some 20 years later than planned.

"I never expected the results to be the disaster they turned out to be. It's an absolute, monumental scandal and what it shows is just how far governments are prepared to go to support the nuclear industry," Mr Meacher said. "I will certainly be writing to the National Audit Office and contacting the chair of the Public Accounts Committee. It is quite simply an utter scandal that needs a thorough investigation."

One key area to be investigated is what BNFL, which was then in charge of Sellafield, had told the government about prospective Japanese orders for Mox fuel, which were crucial to the business case for giving it an operating licence.

The Independent understands there is only one definite order from a Japanese power company for Mox fuel. Other Japanese companies are understood to be waiting to see whether this order is fulfilled before they commit themselves fully, which is not likely now for at least another five or six years – if ever.