The terms offered by EDF amount to 52 dollars per share, the French group said, or 96 percent more than the price offered by MidAmerican Energy controlled by US financier Warren Buffett, which is pursuing a bid for the whole of Constellation Energy worth 4.7 billion dollars.

The price of shares in EDF, the biggest generator of nuclear power in the world, slumped by 6.30 percent to 41.76 euros.

The overall French market was showing a fall of 2.13 percent. So far this year, EDF shares have fallen by nearly 50 percent, and the CAC 40 stock index by 45 percent.

The chief executive of EDF, Pierre Gadonneix, said the terms offered by the French group were "markedly better" than those offered by MidAmerican.

A stock trader, who declined to be named, told AFP that the EDF terms amounted to "an enormous premium" on the offer by MidAmerican Energy.

He commented that EDF needed a partner in the United States to develop the new generation European EPR nuclear power generating system, saying that the French offer might succeed because the terms were attractive.

EDF's nuclear capacity produces most of the electricity consumed in France, and also produces power for export throughout Europe.

France, via EDF (Electricite de France) and its nuclear power engineering giant Areva, is a leading force in the global nuclear energy market, which has gained new vitality in the last few years as oil and gas prices rose.

EDF said that its proposal was based on the creation of a joint company with Constellation Energy and was conditional on approval from US authorities, if the agreement between MidAmerican Energy and Constellation Energy were dropped.

EDF already owns 9.51 percent of Constellation Energy. Shareholders in the US group are to vote on December 23 on the offer from MidAmerican Energy, which their own board has recommended.

EDF had already said it believed the offer from MidAmerican Energy undervalued the target group and said it might increase its own shareholding.

Press reports had also suggested that EDF might link with US investment fund KKR to make a counter-bid, but six weeks ago it said it was dropping any such idea because of the effects of the credit crisis on the availability of funds.

But EDF, in its statement on Wednesday, said that its latest offer was not subject to any financing conditions.

EDF also said its proposal involved the provision of one billion dollars initially, as part of the purchase price, and an option enabling Constellation Energy to sell its non-nuclear activities to EDF for up to 2.0 billion dollars.

In July 2007, EDF concluded an agreement with Constellation Energy to build two so-called third-generation EPR reactors.

Constellation Energy is also linked to Areva, having agreed to buy one of its EPR reactors.

At the end of September, EDF announced the biggest takeover in its history by buying British Energy for more than 15 billion euros (19 billion dollars), thereby obtaining a powerful position in the British nuclear energy sector.

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