AN investment bank has stepped in to acquire a stake in Britain's biggest power station at a fraction of its value.

Goldman Sachs International has offered £130m for a 21 per cent stake in the debt-riddled Drax Power Plant.

The proposed deal is half the value of the share of the power station's debt, which stands at £1.3bn.

Despite being a surprisingly cheap bid, Goldman Sachs was at pains to point out that it was an improvement on the £80m offered by International Power for a similar stake.

Simon Mansfield, managing director of Goldman Sachs International, said: "Goldman Sachs' offer is structured to provide significant benefits to Drax's customers and stakeholders today and in the future.

"Our extensive experience in the energy sector and our recognised risk management abilities will also be positive for Drax's customers and stakeholders.

"We believe the long-term prospects for the energy sector in the United Kingdom remain attractive."

Goldman Sachs International's offer is on the table until next Friday.

That deadline is the same imposed by International Power, which wants to buy a share of the plant's debt and take over the general running of the plant.

Drax is in the hands of independent directors PricewaterhouseCoopers after its owner, American energy group AES, walked away from the plant when creditors failed to agree a deal that would have returned less than half the money it was owed.

Banks and bondholders are owed £1.3bn but were offered 47p for every £1 debt by AES.

The plant, near Selby, North Yorkshire, was plunged into crisis last year when its biggest customer, the electricity supplier TXU Europe, failed to pay a £50m bill, and went into administration.

AES acquired the 4,000 megawatt Drax plant in 1999 for £1.9bn, but wrote down the value of the plant in its accounts to zero after TXU went into administration.