Ian King will push BAE into alternative businesses such as building nuclear power stations to offset falling defence spending.

The new chief executive wants Europe’s largest defence company to expand into the civil sector.

Initially, these efforts will focus on the provision of security and antiterrorism equipment in the UK, the United States and South Africa.

However, Mr King is also understood to be interested in using BAE’s nuclear submarine capability in the civil market.

The Government wants to begin a new phase of building nuclear power stations to reduce the country’s reliance on fossil fuels. The current reactors are likely to be replaced from the end of the next decade, which will mean that construction should begin in the next five years.

A number of utility companies have expressed an interest in owning and operating these new power stations, but there is a severe shortage of engineers with the experience needed to build them.

Sizewell B, the reactor most recently built to serve the civil market, was completed 23 years ago.

However, BAE and its partner Rolls-Royce have built numerous reactors for the Royal Navy’s nuclear-powered submarines in recent decades, and Mr King is considering using this expertise to enter the civil market.

This could provide an additional revenue stream in the medium term, just as defence spending in the UK and US is reduced.

Mr King said: “We need to think about where we can use our capabilities more broadly.”

VT, the defence services group, has also identified the civil nuclear sector as an attractive market.

It spent £75 million last year buying a division of British Nuclear Fuels and the company hopes that this will enable it to become involved in the decommissioning of older reactors.

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