SMALL shareholders in Northern Electric, the British regional electricity company, have accused the American power giant that wants to take it over of "harassment".

The Northern Electric Small Shareholders' Association (NESSA) said individual investors had complained they had been phoned at home by CE Electric.

Mr Chris Foote Wood, chairman of NESSA, said: "Many of them find this tactic unacceptable."

CE Electric, which instigated the hostile bid last month, denied the accusation, saying it was merely phoning investors to make sure they had received the offer document which was posted last week.

CE, owned by CalEnergy and Mr Peter Kiewit of the US, made a £651 million bid for the company, valuing it at 630p a share. Northern is understood to be asking for 700p a share.

Mr Foote Wood said: "CE Electric has already sent its proposals to all shareholders and it is up to each individual to decide whether or not to accept their offer.

"Many small shareholders are elderly and some have found these telephone calls harassing and unwelcome. If CE Electric has to ring someone with less than 2,90 shares, they must be desperate.

There are about 80,000 small investors with less than 1,000 shares who hold about 20 per cent of the company.

A spokesman for the CE Electric confirmed the company had telephoned small shareholders in order to check they had received the offer document.