Nuclear power generator British Energy is to get a further £240 million from the government in a bid to keep the troubled company afloat.

The cash is in addition to a £410 million loan granted to the company earlier this month.

The original loan had been due for repayment on Friday, but that date has now been extended until November 29.

Patricia Hewitt, the trade secretary, said the money had been given in accordance with European regulations.

The Department for Trade and Industry is continuing in talks with the company and other interested parties as it seeks a long term solution to the company's financial difficulties.

British Energy said in a statement that its outlook remained uncertain.

"At this stage there can be no certainty about the final shape of any restructuring or whether it will preserve value for investors," it said.

Executive chairman Robin Jeffrey added: "This enables us to continue to operate and to ensure that our objective of maintaining safe operations will be met whilst restructuring options are developed."

Hewitt said that so far "no commitments [have been] given on the company's long term future".

"Whatever the outcome at the end of this period, the government will continue to act to achieve its objectives of ensuring nuclear safety, security of supply and value for money for the taxpayer, recognising the key ongoing role that employees and suppliers who are providing goods and services essential to the safe management of the UK nuclear power stations will play," she said.

But shadow trade secretary Tim Yeo said the government was "dithering" over what to do.

"Our advice remains the same. As Britain's leading carbon-free energy producer British Energy should be exempted for the Climate Change Levy.

"Secondly the reprocessing costs borne by British Energy in this country should be brought more into line with those it pays in North America," he proposed.

The aid decision came under fire from the Socialist Environment and Resources Association, an environmental campaign group affiliated to the Labour Party.

"British Energy is a lame duck company that should be put out of its misery without any further delay. The government should not be propping up a failing business and seriously skewing its long-term energy policy," said SERA chair, Bill Eyres.

"Given that the public already faces massive financial costs for the long-term management of the company¹s radioactive waste, it is foolhardy for ministers to be throwing good money after bad."