Atomic energy chief quits after buyout vetoed

The chief executive of the United Kingdom Atomic Energy Authority is to step down following speculation that he wanted to lead a management buyout and rumours of clashes with the organisation's chairman.

Dipesh Shah announced yesterday that he would not seek an extension to his contract, when the current three-year term as chief executive of UKAEA expires in the autumn. Mr Shah, 53, has been linked in recent weeks with leading a management buyout of the clean-up arm of the state-owned organisation.

He said that he was quitting because UKAEA had moved into the next phase of its development. "I have immense confidence in the future of the organisation. In the last three years, we have achieved a great deal," Mr Shah said. He said that the organisation had now been split into three divisions: a business arm that does clean-up work at Britain's nuclear sites; a unit that looks after nuclear sites; and a research department studying nuclear fusion.

Mr Shah said that UKAEA had made no decision on the privatisation of the clean-up business and he did not expect an imminent decision. "There are a range of options that are reviewed by the board on a continuous basis," he said.

He admitted, however, that, had the sell-off proceeded, he was interested in leading a management buyout - the unit has been valued at £450m. He is believed to have sounded out private equity backers for a bid.

"Were a change of ownership contemplated, I would have been happy to consider chairing that [buyout]," Mr Shah said.

The ultimate decision about privatising UKAEA lies with the Government. Executives are thought to have become increasingly impatient with the lack of progress towards privatisation. Some UKAEA sources attributed his departure partly to a clash with Barbara Thomas Judge, the organisation's non-executive chairman. Insiders alleged that she interfered with the running of UKAEA.

One source said: "Dipesh's life was made impossible by his chairman. I think that the board's opposition to an MBO was the last straw."

Mr Shah said he would not comment on individuals. But he added: "I have enjoyed the full support of my executives and members of the board throughout my tenure."

Mr Shah will now seek new roles. He is already part-time chairman of the utility Viridian and a non-executive director at the defence group Babcock. Ms Judge, an American, holds directorships and other senior positions at over a dozen companies and organisations. A lawyer by background, she was the first woman to chair the UKAEA. Ms Judge, who is married to the businessman Sir Paul Judge, could not be reached for comment.

In a statement, she said: "On behalf of the board, I want to be the first to thank Dipesh for his important contribution to UKAEA's development and for his leadership of the executive team."

UKAEA has teamed up with the engineering group Amec and a US partner, CH2M Hill, to bid for £56bn worth of clean-up work at Britain's civil nuclear sites. The decommissioning of the 20 electricity-generation, fuel-reprocessing and nuclear-research sites is valued at £2bn a year and about half of the contracts are due to be let by the end of 2008.