RJB Mining, which owns the Selby coalfield, has confirmed that it is in talks that could lead to a takeover bid.

The news of a possible RJB buyer follows a £800 million coal contract with Drax power station signed earlier this month to supply coal for the next five years.

It followed a £74 million rescue subsidy from the Government to help them compete against heavily subsidised foreign coal.

RJB said talks were at an "exploratory stage" and there was no certainty an offer would be forthcoming.

A spokesman said: "There has been a registration of interest for the company but whether it comes to anything only time will tell.

"We have had to make the announcement to meet stock exchange requirements."

Shares in the group leapt 23 per cent to 59p on the news, valuing the company at £86 million.

RJB currently supplies about half the needs of Britain's coal burning power stations and about 60 per cent of the requirement at Drax.

It is understood that if the bid is successful it is likely that Richard Budge, the current chief executive, will remain as head of the business.

Charles Kernot, mining analyst at BNP Paribas said: "The interest could be from a mining company that wants to get into coal in the UK, or a venture capital or property-related investor."

A bid for RJB is thought to need to come in at 100p-a-share or more, which would value the company at £146 million.