"Centrica confirms that it is in discussions with a third party with a view to Centrica taking a minority ownership position in British Energy, subject to various conditions, including this third party successfully acquiring British Energy," said a statement.

Last week, EDF had a multi-billion-dollar bid for British Energy turned down.

Centrica added on Monday that it would consider merging with British Energy should it fail to strike a deal with the "third party."

"In the event that the third party does not proceed with an offer for British Energy, or Centrica's discussions with the third party do not result in an agreement, Centrica might consider a number of other alternatives with respect to British Energy.

"These alternatives may include ... a possible merger of Centrica with British Energy, only if terms could be agreed and if all parties are fully supportive," the statement added.

Centrica stressed it was not in direct discussions with British Energy.

EDF, Europe's number one electricity producer, had been widely expected last week to confirm that a deal had been struck to buy British Energy, which has a market value of 12 billion pounds (15.5 billion euros, 24 billion dollars).

EDF chairman and chief executive Pierre Gadonneix said Friday that "financial conditions" had not yet been met for the acquisition.

The offer was aimed at the British government's 35.2 percent stake in British Energy. Under takeover rules, any bid for the government stake would trigger an offer for the rest of group.

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