Bill Gates is eyeing a bid to build Britain’s first mini-nuclear reactor in a direct challenge to Rolls-Royce which is scrambling to secure a government contract.

Seattle-based TerraPower, which was founded by the Microsoft billionaire, said it was considering throwing its hat into the ring for lucrative contracts to build Britain’s next-generation small modular reactors or “mini-nukes”.

In a blog post, Mr Gates said the nuclear energy company’s work “has drawn interest from around the globe”, citing agreements with Japan, South Korea and the Luxembourg-based ArcelorMittal steel conglomerate.

TerraPower claims its travelling wave reactor design can “operate for centuries with unenriched uranium fuel”. Founded in 2006, the company secured $830m (£657m) in its most recent funding round last summer.

Unlike many traditional SMR designs, the company's plant, called Natrium, uses a molten salt heat storage system that will allow it to rapidly boost its power output at peak times.

TerraPower told the Sunday Times: “We are currently reviewing the opportunity [to deploy Natrium] in the UK. The UK has a lot to offer in the deployment of new nuclear technologies.”

Rolls-Royce is facing a battle to get its own SMRs approved by the Government after Chancellor Jeremy Hunt said that a competitive tender would be run on the projects, despite £210m of taxpayer money already having been invested in the company's proposal.

Kwasi Kwarteng, the then-business secretary, said at the time that the investment would help position Rolls-Royce “as a global leader in innovative nuclear technologies we can potentially export elsewhere”.

Last summer, the British engineering company appointed a new chief executive, Tufan Erginbilgic, who described the business as a “burning platform” that had to evolve or die.

In comments to staff he said: “Every investment we make, we destroy value”. In March, Mr Erginbilgic announced an overhaul of Rolls-Royce's top team which included the departure of Tom Samson, who has headed up the SMR division since its inception in 2020.

Rolls-Royce did not respond to a request for comment.

Dozens of other nuclear energy startups are competing to bring their designs into service, with Rolls-Royce competing against the likes of GE-Hitachi, Mitsubishi Heavy Industries and Westinghouse Electric.

In March, US company Last Energy, signed a deal to sell 24 small modular reactors (SMRs) to British customers.

While Last Energy still needs regulatory approval for its designs, the company expects the first of its SMRs to be operational by 2026 with no government funding required.

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