NUCLEAR power provider British Energy said problems at its North-East plant were a major factor in a sharp decline in earnings for the past year, and could continue to adversely affect the company for months to come.

Technical issues in two boiler units at Hartlepool Power Station - which have been offline since November - meant total group output for the year to March 31 was unchanged at 58.4 terrawatt hours (TWh).

Similar problems, which stemmed from the discovery of wire corrosion in the boiler facilities during routine plant inspections, were also discovered at British Energy's Heysham site, in Lancashire, part of which was also forced to close.

The outages at Hartlepool and Heysham meant the company had to spend £70m buying power to meet its contractual obligations.

So far, more than 660,000 man hours have been spent inspecting and assessing the condition of the wire windings on all 32 boiler closure units at the two locations.

The effects of the boiler problems will continue to affect the company, with servicing work expected to cost £50m this financial year, on top of £20m spent in the previous year.

British Energy said it expected all four units at the two sites to be back in service by the end of this year.

Hartlepool is a key site for British Energy. It is capable of supplying more than 1.5 million homes in the region. Plans are being considered to build a replacement reactor at the site, prolonging the life of the station - which is due to be decommissioned in 2014 - and safeguarding about 700 jobs. The company said the output figure masked a better overall operating performance, with progress in the management of generation losses.

Underlying earnings were down to £882m, from £1.22bn a year earlier, but the performance still beat City expectations.

British Energy, which operates all eight of the UK's nuclear power stations, said this month that it needed several weeks to consider a range of takeover proposals.

British Energy's attraction to bidders, such as France's EDF, lies in its existing sites and the role they may play in the proposed development of the next generation of nuclear power supply.

Chief executive Bill Coley said the company had made good operational progress, despite the disappointing financial performance.

He said: We are well positioned to manage our existing fleet to best advantage and look ahead to playing a pivotal role in the new build programme.'' Other sites, alongside Hartlepool, being considered for new build units include four in the South - Sizewell, Hinkley Point, Dungeness and Bradwell in Essex.