Secret nuclear sell-off storm

Britain no longer has any stake in the production of its nuclear warheads after the Government secretly sold off its shares in the Atomic Weapons Establishment in Aldermaston.

Ministers agreed to sell the remaining one-third ownership to a Californian engineering company. The announcement, which means that Americans will now produce and maintain Britain's independent nuclear deterrent, was slipped out on the eve of the parliamentary Christmas holiday. Officials refused to say how much the deal raised.

Opposition MPs last night expressed concern that the stake may have been sold off below market value to raise much-needed money for the Treasury. They accused the Government of trying to conceal the sale of the stake in AWE Management Limited by failing to make an announcement in Parliament.

There was also anger that Britain would no longer directly control the site where Britain's nuclear warheads are produced and maintained.

A terse one-paragraph statement posted on the website of the state-owned nuclear firm BNFL confirmed that its one-third stake in the Atomic Weapons Establishment (AWE) had been sold to the California-based Jacobs Engineering Group, a global engineering firm which already carries out work for the nuclear weapons and research establishment in Berkshire.

Yesterday, the MoD insisted that it had retained a "special share" in the establishment which allows it to intervene in the site or sack the operators if necessary. A spokesman said the deal would protect the independence of the nuclear deterrent and ensure Britain's strategic interests were maintained.

The Ministry of Defence owns the site and equipment at the establishment, but contractors have carried out the work of the base since 1993.

The AWE, based at Aldermaston and Burghfield in Berkshire, employs 4,500 people and more than 2,000 contractors. It designs, assembles, maintains and decommissions nuclear warheads, but the organisation is also a major centre for nuclear weapons research with expertise in advanced physics, materials science and super-computing.

The current contractors, a joint venture between BNFL, the business services group Serco and the American defence giant Lockheed Martin, were appointed in 2000 and will run the base until 2025.

The successful bidder, Jacobs, is an $11bn-a-year engineering concern with interests ranging from aerospace to the oil and gas industries. Last year, it lost out in bidding to operate 10 Magnox nuclear power stations in Britain.

MPs expressed anger that Parliament had not been informed of the sale of the AWE. The shadow Defence minister, Gerald Howarth, said: "The AWE is critical to Britain's nuclear deterrent capability and we find it astonishing that the decision regarding the increase in US involvement in the company was not announced to Parliament. It is now imperative that the Government spells out its understanding of the implications of this move for the United Kingdom and our nuclear deterrent."

Richard Bacon, a Conservative member of the Commons Public Accounts Committee, said the sale needed to be urgently scrutinised: "This is the type of thing we would raise with the National Audit Office. There are a number of economic questions, but there are national security questions."

Nick Harvey, the Liberal Democrat defence spokesman, added: "It is staggering that the Government could do something of such strategic importance without informing Parliament.

"The whole argument used for Britain having a separate weapons establishment is that this is required by the [nuclear] non-proliferation treaty, as technology-sharing is not allowed. We must therefore query the rationale of a US company having a majority shareholding in AWE ... There has always seemed to be a lot of cloak and dagger around Aldermaston, and now it appears the Government has concealed something of huge significance from Parliament. If the company has declared the deal is going ahead to the New York Stock Exchange, they must be fairly sure this is the case."

Anti-nuclear campaigners claimed the sale would compromise the independence of Britain's nuclear deterrent. Jeremy Corbyn, the Labour MP for Islington North, called it "astonishing", adding: "It's almost unbelievable that something as serious as the development of nuclear weapons should be privatised to an American company." Kate Hudson, chairman of the Campaign for Nuclear Disarmament, said: "It is outrageous that control of Britain's so-called 'independent' nuclear weapons is being handed over to American corporations."

But a spokesman for the MoD said: "The safe operation of AWE will remain unaffected by the sale. MoD worked closely with colleagues in the Department for Business, Enterprise and Regulatory Reform, and BNFL, during the sale process to ensure British strategic interests were taken into account. UK sovereign interests remain protected at all times, as does the independence of the UK deterrent."

What's for sale next?

The Treasury is considering privatising other state assets in what critics have called a recession "fire sale". These include:

*Ordnance Survey

*The Met Office

*The Forestry Commission

*The Queen Elizabeth II conference centre in Westminster

*The Covent Garden Market Authority

*The Royal Mint

*The Tote

*Buildings owned by British Waterways

*British Nuclear Fuel's stake in uranium enrichment company Urenco

*The Oil & Pipeline Agency, which manages the UK's underground network of fuel distribution pipelines.