THE future of Drax Power Station remained in question today, when its U.S. owner abandoned restructuring plans after failing to reach agreement with creditors.

AES has withdrawn four of its executives from the Drax staff, and left independent directors in charge of the plant on behalf of lenders.

AES had given creditors, including banks and bondholders, until midnight yesterday to rubber-stamp its proposed financial restructuring.

But they refused to accept AES's plan to slash Drax's £1.3 billion debt mountain by offering to pay 47p for every £1 it owes.

The debt-laden plant plunged into crisis last year when its biggest customer, the electricity supplier TXU Europe, failed to pay a £50 million bill, and was put into administration.

Under the terms of the deal, TXU bought 60 per cent of Drax's output at rates significantly above current market prices, which have dropped 40 per cent since 1998 on increased competition and over-capacity.

A spokeswoman for AES Drax said it was "business as usual" despite the resignations of four AES Corporation directors, including station manager Garry Levesley.

She strongly refuted claims that Drax was in danger of going into liquidation, saying: "The plant is operating normally today and will continue to operate normally."

Creditors will assess International Power's offer to buy a stake in Drax valued at around £80 million, along with any other third party approaches they receive.

Updated: 14:00 Wednesday, August 06, 2003