French utility EDF has agreed a £12.5 billion (€15.8 billion) bid for British Energy, sweetening its bid to control Britain's nuclear power industry after months of wrangling.

EDF, the world's biggest producer of nuclear energy and already the fifth largest electricity supplier in the UK, said it was offering 774 pence per British Energy share, or an alternative of 700 pence in cash plus one nuclear power note, a financial instrument linked to BE's future performance.

EDF predicted the deal would lead to cost savings of €200 million and lift group earnings in 2009. It said it had assurances from BE's investors it would get at least 45.16 per cent of the utility.

At the same time, British Gas owner Centrica said it was in talks with EDF to buy a 25 per cent stake in British Energy at the same price. - (Reuters)