SO NOW it's official. Tony Blair, the Prime Minister, says nuclear power is "back on the agenda with a vengeance" - a comment that can safely be taken as confirmation of what had become the government's worst kept secret: new nuclear power stations are on the way.

"The facts", as Blair puts it, are straightforward. As things stand, only one UK station - Suffolk's Sizewell B - will still be active in 15 years. That means that an energy resource now generating about 22 per cent of the UK's electricity will dwindle to supply about 4 per cent.

Something has to be done, and that something is simply to replace old with new.

The strategy bristles with controversy. The Committee on Radioactive Waste Management (CoRWM) is still in the early stages of identifying what to do with nuclear waste, a solution likely to involve some kind of deep land depository.

Clean-up is by far the greatest public concern about new nuclear power.

There are also concerns on a corporate level. The development will deliver a massive boost to one, hugely controversial, company: British Energy.

The Livingston-based operator came within a whisker of collapse just three years ago. Yet this news delivers the possibility of a life-span well into the second half of this century.

BE - which owns eight nuclear stations, including Torness in Lothian and Hunterston B in Ayrshire - had to be bailed out by the government in 2003 in return for 65 per cent of its cash-flow.

It re-listed, ditched its chief executive, Mike Alexander, and sailed back into the FTSE 100.

Now, far from being forever tarnished by the experience, it has emerged as the only British company with the skills to run the UK's new fleet.

It is thought there will be a competitive auction for the potentially lucrative operator's role. But

BE is more than happy to take on the responsibility - at no added cost to the taxpayer (not a statement everyone believes, judging by the number of calls to The Scotsman yesterday).

Instead, the firm would strike up partnerships or consortiums with private investors, who would effectively bankroll the programme. However, it is first asking the government to shake up station licensing regulations, the planning process and the carbon emissions trading market.

Considering how many man hours and no doubt external consultants this would require, in reality the taxpayer is coughing up a pile.

But whether it asks for subsidies or not, can BE be trusted with the responsibility after its recent woes? Its current performance is certainly good. Operating profits reached GBP 377 million for the first nine months of the financial year to end-March, while its share price has doubled over the past year to 667p.

But - and it's a big but - a lot of this has to do with the price of wholesale electricity. When BE ran into financial distress, prices were about GBP 15 per megawatt hour. Now, they are up at GBP 55.

Does this matter? It depends on whether the company would simply fall apart again if the market went into another free-fall, a sensitive issue when considering nuclear build.

Analysts say it is not impossible. But the group has a lot more flexibility in coping with a low-price environment. New chief executive Bill Coley is generally highly regarded, and is continuing his predecessor's policy of investing in current stations.

The sum of these facts is that a recently ridiculed company is set to be at the heart of any operators' bidding war.

Another key question surrounding nuclear build concerns the government's allocation of resources. Its proposed market reforms require a great deal of attention, and it already has its hands full trying to accommodate another powerful group - the renewables industry. Blair included in his Tuesday night speech that the UK needed a "big push in renewables", but will it be possible to achieve both at the same time?

Chris Tomlinson, head of operations at the British Wind Energy Association (BWEA), says: "It should not be a wind versus nuclear argument, but for the industry to flourish there needs to be additional financial support. Putting more into nuclear does not come at the expense of renewables."

The BWEA thinks that 21 per cent of UK electricity can come from wind, but Maf Smith, chief executive of Scottish Renewables, says north of the Border that figure could be 50 per cent - if the government does more to help out.

Again the uncertainty and length of the planning process is a concern. But in Scotland the biggest worry is infrastructure - currently too old and weak to transport all the electricity that might be generated from Scottish wind and marine power.

"Developing our renewables industry without upgrading the infrastructure is like trying to build an economy without roads and railways," Smith says. "Without it, we will not make the 50 per cent targets, and small wind companies trying to access the grid may not be able to."

The problem is encapsulated in the serious challenges to the new line proposed by Scottish & Southern Energy between Beauly and Denny. The inclusion of higher pylons across the Cairngorms National Park has sparked ferocious and powerful opposition.

It is by no means inevitable that the line will be built. And there may be similar opposition to new nuclear power stations, regardless of whether British Energy is awarded the task of running them. New Labour and the Scottish Executive have their work cut out.