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SHAWN MCCARTHY

OTTAWA — Atomic Energy of Canada Ltd. suffered another embarrassing setback Friday as the country's flagship nuclear corporation when it scrapped the development of two Maple isotope-producing reactors after pouring hundreds of millions of dollars into the project.

The federal Crown corporation conducted tests on the reactors this spring and could not find a solution to a design flaw that would make the reactors more prone to a meltdown.

AECL and its private-sector business partner, MDS Nordion Inc., have sunk several hundred million dollars into the development of the Maple reactors, which were meant to secure Canada's dominant position in the market for medical isotopes.

In the past three years alone, AECL spent more than $200-million as it sought an answer to a vexing problem known as a positive power coefficient of reactivity (PCR). The reactor is supposed to have a negative coefficient of reactivity, meaning the nuclear reaction would slow down if the power in the core increased. Instead, the nuclear reaction increased with additional power, heightening the chances of a meltdown.

In an interview, AECL chief executive Hugh MacDiarmid conceded that cancelling the project w as a difficult decision, but said it was made by the company itself, not by the government.

“We are making the right business decision given the circumstances,” he said. “This was a difficult choice given the tremendous efforts expended by our people on development of the Maple reactors. Nevertheless, our board of directors and senior management have concluded that it is no longer feasible to complete the commissioning and start-up of the reactors.”

He said the Maple project was always a high-risk one, but continued spending on it cannot be justified.

A former executive at Canadian Pacific Railway Ltd., the AECL president was appointed late last! year with a mandate to put the corporation on a more commercial footing, as the government considers privatizing it either through an outright sale or the sale of a minority stake.

But AECL has suffered a series of setbacks in its home market and overseas with high-profile disruptions in its isotopes business and a lengthy dry spell in reactor sales.

The problems come as AECL competes with larger international companies to sell several reactors to Ontario.