The talks will reignite debate about China’s involvement in the UK nuclear power industry. Two years ago, the government paused approval for the £18bn Hinkley Point C project because of security concerns over China’s stake.

China General Nuclear Power Group (CGN), a state-run corporation, is said to be interested in buying a major stake in eight power stations, including Sizewell in Suffolk and Dungeness in Kent.

The power stations are operated by EDF Energy, a subsidiary of the French company EDF, but earlier this year, the British Gas owner, Centrica, put its 20% stake up for sale. The Sunday Times suggested CGN hoped to acquire a 49% stake, which indicates EDF could be looking to offload some of its shareholding.

The proposed deal would be a headache for Theresa May, who is concerned about giving China greater access to critical infrastructure projects and has initiated a new national security test for foreign takeovers.

CGN is becoming an increasingly important player in Britain’s atomic plans, and is working with EDF Energy on plans to develop a new nuclear power station at Bradwell-on-Sea in Essex.

The sale could attract interest from pension and insurance funds, but analysts say the pool of bidders is small because the reactors have a limited shelf live.

Paul Dorfman, a senior researcher at University College London’s Energy Institute, said Britain was an outlier in its openness to Chinese investment.

“It’s entirely credible [that China would be allowed to buy the stake] in the context of what the British government is doing,” he said. “There is no other OECD country that would allow China to own any of its critical infrastructure, let alone its nuclear infrastructure.”

Dorfman said EDF, with €33bn (£29bn) of debt, was eager to raise funds from asset sales. “EDF is in financial difficulties and has been for some time. It’s looking to sell off whatever it can sell off. It’s worried about debt, its credit rating … plus its waste and decommissioning liabilities,” he said.

The government will take over the decommissioning of Britain’s 12 Magnox sites, including the former nuclear power stations at Dungeness in Kent and Hinkley Point in Somerset.

The move is a response to the fallout from the Nuclear Decommissioning Authority (NDA) awarding a 14-year deal to the international consortium Cavendish Fluor Partnership in 2014.

Last year the government settled with two US companies that lost out on the £6.2bn contract and brought a legal challenge over the tender process.

Ministers terminated the contract early, leading to speculation over whether it would be put out to tender again to the private sector or brought back into public hands.

David Peattie, the NDA’s chief executive, told staff he understood they had faced uncertainty in recent months, as he confirmed that the private company Magnox Ltd would become a subsidiary of the NDA on 1 September. He said the change would result in “more efficient decommissioning”.

A source close to the process said: “The reason that this has been done is to remove some of the commercial complications and the large fees paid to contractors. This will ensure more money is spent directly on cleaning up these sites.”

Unions said they wanted talks with the new management regime for assurances over pay and terms.

Peter McIntosh, the Unite union’s acting national officer for energy, said: “This decision is long overdue. The 2014 contract should not have been awarded to any organisation.”

He added: “We need to ensure the taxpayer gets value for money through the transfer of the business and it is not paid for at the expense of the workforce.”

Whitehall’s spending watchdog, the Public Accounts Committee (PAC), has strongly criticised the NDA and the Department for Business, Energy and Industrial Strategy over the handling and oversight of the nuclear cleanup contract, one of the government’s biggest ever.

A review of the failings that led to the bungled process, written by the former National Grid boss Steve Holliday, is due to be published later this year.

Bringing the Magnox work back into the public sector means that about 85% of Britain’s nuclear cleanup work is in public hands, after the NDA’s takeover of the Sellafield storage and reprocessing site in 2016.

The PAC last week announced an inquiry into the NDA’s work at Sellafield, which is forecast to be £913m over budget and faces potential delays.