Ministers are looking to raise up to £3bn before the end of the year through the sale of the government's 33 per cent stake in Urenco, the uranium enrichment company, in one of the biggest privatisations in years.
The deal would be a relief to the Treasury, which hopes that a series of sales will put a dent in the country's towering debt. Royal Mail could also be sold this year, raising £3bn-£4bn.
Urenco has risen to the top of the sell-off list following indications that the Dutch government, which owns a third of the company, is prepared to sanction a sale to private buyers.
Vince Cable, business secretary, hopes to announce plans for a full or partial sale of the UK stake in April with a view to completing the privatisation before the end of the year.
Mr Cable has appointed Morgan Stanley to advise on the sale. German utilities - RWE and Eon - have begun the process of selling their stakes in the Urenco, which enriches uranium for power plant fuel and is valued at about €10bn.
The sensitivity of Urenco's operations means any sale must be sanctioned by London, Berlin and The Hague, which are expected to keep golden shares.
Jeroen Dijsselbloem, Dutch finance minister, told the Netherlands' parliament in March that he was in talks with the British and German co-owners over a possible sale of Urenco. But he did not indicate whether the Dutch government favoured such a disposal. The Netherlands may choose to retain its stake while allowing Britain and Germany to sell theirs.
Urenco announced its full-year results on Thursday, confirming its appeal to investors. Deliveries rose 23 per cent and revenues increased to €1.6bn. It also boasted a strong order book - standing at €18bn and extending beyond 2025 - and said its global market share increased from 29 per cent to 31 per cent.
Potential buyers could include Cameco, the Canadian uranium group, Canada Pension Plan Investment Board and Toshiba, the Japanese industrial company. Areva, the French nuclear company, or a private consortium could also be interested.
"The UK is in ongoing discussions with the Dutch and German governments on a possible sale of the UK shareholding of Urenco," the department of business said. "The UK remains fully committed to upholding nuclear non-proliferation, safety and security principles. Any sale must provide strong and robust protections in these important areas."
Cross-Whitehall talks are continuing to ensure security concerns are addressed as Urenco's centrifuge technology can be used to make atomic weapons.
Urenco has facilities in the UK, where it employs 1,400 people, as well as in the Netherlands, Germany and the US.