Hartlepool nuclear power station operator British Energy last night announced another jump in the amount of money paid for its supplies.

British Energy also revealed that output in the year to March 31 was better than the previous year, helping shares in the company climb by four per cent in the FTSE 100 Index.

The trading update continued the progress seen since a financial restructuring rescued the debt-laden business from the brink of collapse in 2003.

British Energy has pledged to invest £250m to improve its operating performance, following recent boiler unit closures at one of its plants at Heysham, in Lancashire, and other outages at Hartlepool.

Rising power prices have benefited British Energy, with 65 per cent of its planned output for this financial year contracted at an average price of about £41 per megawatt hour (MWh). BE said in February that it had contracts in place for 60 per cent of output at £37.8 MWh.

The company meets about a fifth of the UK's energy needs and has the capacity to produce 10,000 MW.

Restructuring and the rise in power prices have propelled the company into the FTSE 100 Index - two years after banks and bondholders wrote off about £1.3bn in debt in return for control of the group.

The Government-backed restructuring plan, agreed in 2003, diluted the stakes of investors to only 2.5 per cent and limited their ability to benefit from the share price surge.

It is believed that many of the bondholders who swapped debt for equity have sold on their stakes to institutional investors as the value of British Energy shares increased, while managers have an interest of less than three per cent in the company.