British Trade and Industry Secretary Mr Ian Lang yesterday vigorously defended his decision to effectively block any takeover bids for the power generators National Power and PowerGen.

Last week, Mr Lang said the government would retain, for the time being, its "golden shares" in the companies, which prevents any one owner holding more than 15 per cent of either firm.

The decision - which blocked the acquisition plans of Southern Company of the United States for National Power - followed an earlier surprise decision to block two multi billion pound mergers in the sector. National Power was last month prevented from buying the regional electricity company Southern Electric in a £2.5 billion sterling deal while PowerGen was blocked from buying Midlands Electricity for £1.9 billion.

Mr Lang said the Government still supported competition in the industry. But he added: "Until competition has become fully established in a new market such as power generation it can be necessary to take steps to ensure that the process of change is not snuffed out before it has developed to a robust structure that will deliver benefits to the customers. See also Page 6