The German energy industry walked out of talks with the federal government over the proposed phasing out of nuclear power. The walk-out, which was over a separate tax issue, is a setback to the governments ambitions to scrap nuclear power.

At issue is a tax burden resulting from new legislation introduced by the former finance minister, Oskar Lafontaine. The Chairman of RWE said discussions on nuclear power could only resume after the tax issue had been resolved. The utilities believe they will face a tax bill of $9 billion as a result of a change to the way their reserves are handled. The finance ministry believes the correct figure is less than $4 billion.

The government has already shelved legislation paving the way for the shut down of the country’s nuclear plants. It also dropped plans for an early end to nuclear waste reprocessing. Current signs are that it will be difficult to reach a voluntary settlement.