TOSHIBA has responded to media speculation that its US nuclear division is set to file for Chapter 11 bankruptcy by saying it it is "not aware" of this action taking place.

The embattled Japanese giant - which has a 60 per cent stake in Nugen, the company with plans to build a new nuclear power plant at Moorside, near Sellafield - was responding to a story in the Nikkei, Japan's leading financial publication. Chapter 11 bankruptcy gives a company in financial difficulties protection from its creditors for a limited period to allow it to reorganise.

This report suggested that the firm was looking into this course of action for its US subsidiary Westinghouse Electric, which would build the three reactors for the proposed Cumbrian new nuclear plant.

A spokesman for Toshiba though said: "Toshiba is not aware of any intention that Westinghouse commence Chapter 11 of Title 11 of the United States Bankruptcy Code at this moment."

Toshiba has forecast a 713bn yen (£5bn) loss in its nuclear business and its woes stem mainly from Westinghouse.

Last month the company announced this subsidiary may have overpaid - by several billion dollars - for another nuclear construction and services business.

This led the company to the review of its involvement in non-Japanese nuclear projects - including Moorside - and put its semiconductor business up for sale.

The company's lawyers are also investigating "inappropriate pressure" by Westinghouse's managers in relation to the purchase of the other nuclear business.