The troubled firm which owns Hartlepool's nuclear power station has been given a stay of execution to enable it to tackle its substantial debt problems.

British Energy will have a Government loan facility extended to next year - a move which should safeguard 600 jobs in the region for the near future.

The country's biggest electricity generator will not be given any money above emergency aid of £650m already given, but the facility will now be extended to March.

Under the changes, Adrian Montague was yesterday appointed chairman to replace Dr Robin Jeffrey.

Creditors, who are owed more than £1bn, will be asked to compromise their claims which will lead to "very significant dilution" of existing shareholders.

The Government said it was supporting the restructuring plan and would contribute "significantly" to the company's £2.1bn nuclear fuel liabilities.

This will cost the Government between £150m and £200m a year for the next ten years.

British Energy's problems emerged in September when the loss-making group warned the Government that it could face insolvency if it did not receive immediate financial assistance.

The company provides up to a fifth of Britain's power and the crisis prompted concerns that lights could go out in some parts of the country and that workers could lose their jobs.

British Energy employs 5,200 people in Britain and, in addition to Hartlepool, has nuclear plants at Torness and Hunterston in Scotland, Dungeness in Kent, Heysham near Blackpool, Sizewell in Suffolk and Hinkley Point in Somerset.