Bidders interested in buying the Government's share in the uranium company Urenco have contacted its former chairman about forming a consortium to table an offer for the stake which could be worth up to £4bn.
Neville Chamberlain, who was chairman of Urenco from 2002 to 2005, said: "I have had discussions with various potential bidders." He added: "I would not be surprised if a bid emerged."
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Prime minister Gordon Brown has mentioned the British stake in Urenco, one of the world's largest uranium enrichment companies, several times as an asset which could be privatised. The move is part of the wider sell-off of Britain's nuclear assets.
Britain currently holds the stake through British Nuclear Fuels, but the shares will be transferred directly to the Government on November 1 as part of the strategy to break up and privatise BNFL. It will be managed by the Shareholder Executive.
The auction of Urenco is expected to start in earnest in November. Nuclear sources said several investment banks were already working on possible deals.
Urenco is jointly owned by the British, Dutch and German governments and was established by the 1970 Treaty of Almelo.
Based in Marlow, Buckinghamshire, Urenco is seen as a strategic asset whose output is crucial for nuclear power generation in Europe. The company only provides uranium for civil use.
Because of Urenco's sensitivity, any consortia which want to make a bid would need to have a major British element. UK utilities would be likely to be interested and would need to end up as the majority owner of the stake.
Germany and The Netherlands have been reluctant for Urenco to be privatised but the UK Government is keen to push ahead with a sale, in part because it would boost its finances at a time when they are under strain.
The value of Urenco has ballooned in recent years because the price of uranium has soared. Analysts believe the UK stake could be worth between £3bn and £4bn.
Chamberlain said potential bidders had contacted him because he knew Urenco "very well".
He helped draft the Treaty of Almelo and was a director of the company from 1981. Chamberlain was also chief executive and then deputy chairman of BNFL between 1986 and 1999.
"If anybody asked me I would say Urenco is a jolly good business," Chamberlain said.
He added that the interested parties had contacted him, and he is "not involved with a specific bid yet".
As chancellor Brown pushed for the privatisation of Britain's nuclear businesses, arguing the move had the twin benefits of boosting the Treasury's coffers and removing the potentially huge risk of nuclear problems from the public domain.
The process got off to a good start with the auction of Westinghouse, the US-based nuclear engineering company owned by BNFL. After a tightly fought auction Japan's Toshiba clinched the business with a $5.4bn (£3bn) bid in 2006.
The Government is also trying to sell its stake in the Atomic Weapons Establishment (AWE), which manages the Aldermaston weapons site on behalf of the Ministry of Defence.
The weapons facility near Reading, Berkshire, is run by a management company that is a consortium equally divided between BNFL, the support services company Serco and American defence giant Lockheed Martin.
However, sources said plans to sell the BNFL stake had run into difficulties.