"We are in negotiations with a company called NNC related to potential business opportunities," Ontario Power spokesman John Earl said. "It basically is in regard to a group in OPG that does safety analysis work."

NNC Ltd. is Britain's leading nuclear consultant and it is affiliated with British Energy.

The move to contract out safety analysis has raised concerns among some nuclear consultants.

"I think it's extremely worrisome if OPG is losing its direct control over nuclear safety," said David Martin, a nuclear safety consultant with the Sierra Club of Canada. "When you start to divorce financial decision making from safety-related decision making, that could lead to problems."

OPG is one of the largest nuclear plant operators in North America. It manages 12 reactors, including four at the Pickering A plant that were shut down in 1997 because of safety concerns. Reopening that plant has been delayed until 2003 and will cost as much as $2-billion, about 54 per cent more than planned.

OPG has about 300 engineers who perform safety analysis. They carry out tests and computer simulations to see how reactors would respond to accidents. Sources say the group has been reorganized internally under the name Newco in preparation to be sold.

OPG also operates 69 hydroelectric plants and six fossil-fuel plants. In total, it produces 85 per cent of Ontario's electricity.

OPG also owns eight reactors at the Bruce station but it has leased operation of them to British Energy. NNC is working with British Energy to restart four of the Bruce reactors that were also shut down because of safety concerns.

An official at NNC declined to comment on the OPG negotiations.

Mr. Earl would not say when a deal will be reached or how much it would cost.

"Before OPG could conclude any agreement with NNC, the [Canadian Nuclear Safety Commission] would have to be satisfied that OPG would continue to meet its safety requirements," Mr. Earl said.

A deal with NNC would be the latest in a series of restructuring moves by OPG. The company has contracted out its computer operations and has announced plans to cut 2,000 jobs, or 17 per cent of its work force, over the next two years.

Mr. Martin said Britain's nuclear regulator has raised concerns about contracting out by British Energy.

"The ongoing concern of the regulator in Britain has been that areas of important managerial control are being contracted out and they have deemed that to be unacceptable," he said. British Energy "has been pushing the envelope. Obviously, OPG is copying that managerial style."

Michel Cleroux, a spokesman for the Canadian Nuclear Safety Commission, said the commission is aware of OPG's plans.

"Having [safety analysis] done by someone to whom you contract the analysis is something that's done quite frequently in other countries," he said. "The analysis [reports] are what are used to determine safe operating limits within which safe operations are carried out. Operating within the limits continues to be [OPG's] responsibility."

Tom Adams, who heads Energy Probe, said the move is dramatic and will raise some concerns.