THE £2bn three-way bidding contest for Europe's biggest coal-fired power station was reduced to one contender yesterday.

Drax, which is near Selby, North Yorkshire, provides enough power to meet seven per cent of the UK's electricity needs. US energy producer Constellation and its partners are the only bidders left.

A joint proposal from International Power and Japanese partner Mitsui was withdrawn because the offer price was too low. The other approach, from a private equity consortium, failed to gain Drax support.

Drax said the latest price offered by Constellation and private equity partners was better than the £1.9bn previously put forward.

The owners of the station will hold talks with the consortium while continuing to take steps towards a refinancing and stock market flotation.