The company will now receive £275m of taxpayers’ money instead of £200m.
British Energy, which produces a fifth of the UK’s power, blamed the costs of Sizewell B and Heysham 1 as reasons for its cash problems.
Earlier this week bosses at British Energy claimed it was facing a short-term liquidity problem.
The department said the loan would only be available until February 2004 or until British Energy sold its interest in a US company, Amergen, whichever came first.
The loan will then be reduced back to £200m.
The department also said the money and subsequent interest would be repaid in full.
Steve Absolom and Will Wright from KPMG Restructuring have been appointed joint administrators to City Motor Holdings and associated companies
Partners from Johnston Carmichael have been appointed as joint administrators to Axon Well Interventions Products UK
Begbies Traynor have been appointed administrators of William Anelay Ltd, York, one of Britain’s longest-established construction and heritage restoration companies
Smith & Williamson has been appointed administrators of charity 4Children