Troubled power company British Energy has been awarded a £410 million loan from the government, it was announced on Monday.

The deal follows discussions since Thursday, when bosses warned that the company, which provides a fifth of the UK's power, faced insolvency without urgent financial assistance.

The situation has been blamed on falling wholesale prices and the shutdown of one of its power stations.

A statement by the Department of Trade and Industry said that the package would last until September 27 "pending clarification of the company's full financial position".

"No decisions have been taken, and no commitments have been given about support beyond this period," it said.

However on Friday, the Financial Services Authority announced that it would be investigating the company's accounts.

In a statement, bosses warned "there can be no certainty that this will preserve value for investors".

Insolvency proceedings would commence if further discussions with DTI officials were unsuccessful, the government said.

Shadow trade secretary Tim Yeo said ministers "should be treating the causes and not the symptoms of this problem."

"Immediate relief is possible. As Britain's leading carbon-free energy producer British Energy should be exempted for the Climate Change Levy," he said.

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

"At a time when investor confidence is crucial the secretary of state must show leadership and remove the unnecessary cost burdens on nuclear industry."