British Energy is currently the subject of a bidding war that would allow the winner to own all eight of its sites, potentially handing the new owner a monopoly on the construction of new nuclear power plants in the UK.
"It would be fundamentally wrong for British Energy to be taken over by a single company that would then have a whip hand over the allocation of [new nuclear] sites," said O'Neill, speaking at Constructing Excellence's "Planning for the Future" energy conference in London.
Currently only one bidder – EdF- is understood to have tabled a bid, and Brown described the prospect of the French generator running the majority of new nuclear site as deeply undesirable.
According to reports in the Daily Telegraph earlier this week, the Government, which owns a 32.5% share in British Energy, agrees and is set to reject EdF's offer.
It is understood the Government favours the sale of six of British Energy's sites to one firm, with the remaining two sold off to separate bidders. This, in addition to the UK's two operational nuclear sites not under British Energy's control and sites potentially released by the Nuclear Decommissioning Authority, would create a much more level playing field in the market place.
This was critical, said O'Neill, to encourage the private sector to invest in a new generation of nuclear power plants.
"I think we have got to find an answer to the ownership that will not deter companies from building new nuclear," he said.