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The government agency in charge of decommissioning nuclear power stations, including Hinkley Point in Somerset, faces a £4 billion funding shortfall.

In the next four years, the Nuclear Decommissioning Authority is expected to see the costs of dealing with nuclear waste soar while income drops as older plants close.

Energy Secretary Chris Huhne has already raised the issue with the Cabinet, fearing the impact on his department's £3bn budget, even before draconian public spending cuts in the autumn.

According to the Guardian, the NDA's budget for this year will be in balance but from 2011-12, the deficit rises to £850 million pounds. In 2012-13 it will reach £950m and then £1.1bn in the following two years.

"As you can imagine this is a fairly existential problem," Mr Huhne told the newspaper.

"The costs are such that my department is not so much the department of energy and climate change, as the department of nuclear legacy and bits of other things."

Hinkley Point A is one of 20 sites around the country which is the responsibility of the NDA. Decommissioning and clean-up costs for the plant on the north Somerset coast, which ceased producing electricity in 2000, are estimated at £1.2bn alone.

Mr Huhne insisted the money would be found, but warned: "I do not think it is possible for anyone responsibly to stand aside and say we are not going to deal with it.

"We just have to, but what we are effectively paying for here is decades of cheap nuclear electricity for which we have suddenly got a massive post-dated bill."

The Liberal Democrats oppose construction of any new nuclear power stations, and a government source said Mr Huhne's comments were a "political intervention".

Energy policy is a key faultline between the Lib Dems and their Conservative coalition partners.

Under the power-sharing deal, the Conservatives are committed to allowing the replacement of existing nuclear power stations provided that they are subject to the normal planning process for major projects and that they receive no public subsidy.

However, the Lib Dems will be permitted to maintain their opposition to nuclear power.