Exhibit
2(b).1  INFORMATION MEMORANDUM    National Grid Transco plc  (incorporated with limited
liability in England and Wales on 11 July 2000)  and  National Grid Company plc  (incorporated with limited
liability in England and Wales on 1 April 1989)  Euro 6,000,000,000
Euro Medium Term Note Programme  Under the Euro Medium Term Note Programme (the Programme)
described in this information memorandum (the Information Memorandum), each
of National Grid Transco plc (NGT) and National Grid Company plc (NGC)
(each, an Issuer and together, the Issuers), subject to compliance with all
relevant laws, regulations and directives, may from time to time issue debt
instruments (the Instruments) denominated in any currency agreed between the
relevant Issuer, the Trustee and the relevant Dealer (as defined below). The
aggregate nominal amount of Instruments outstanding will not at any time exceed
Euro 6,000,000,000 (or the equivalent in other currencies). The Instruments
will only be issued in bearer form.  Applications have been made to admit Instruments issued
under the Programme during the period of twelve months after the date hereof to
listing on the Official List of the Financial Services Authority (in its
capacity as competent authority for the purposes of Part VI of the
Financial Services and Markets Act 2000 (FSMA) (the UK Listing Authority))
and to trading on the London Stock Exchange plc (the London Stock Exchange).
The Programme also permits Instruments to be issued on an unlisted basis or to
be admitted to listing, trading and/or quotation by such other or further
listing authorities, stock exchanges and/or quotation systems as may be agreed
with the relevant Issuer. The relevant Pricing Supplement (as defined on page 5)
in respect of the issue of any Instruments will specify whether or not such
Instruments will be listed on the Official List and admitted to trading on the
London Stock Exchanges market for listed securities (or any other listing
authority, stock exchange and/or quotation system).  Each Series (as defined on page 5) of
Instruments will be represented on issue by a temporary global instrument in
bearer form (each a temporary Global Instrument) or a permanent global
instrument (each a permanent Global Instrument). Global Instruments (being
together, temporary Global Instruments and permanent Global Instruments) may be
deposited on the relevant issue date with a common depositary on behalf of
Euroclear Bank S.A./N.V., as operator of the Euroclear
System (Euroclear) and Clearstream Banking, société anonyme (Clearstream,
Luxembourg). The provisions governing the exchange of interests in any Global
Instrument for interests in any other Global Instrument and definitive
Instruments are described in Summary of Provisions Relating to the Instruments
while in Global Form.  Programme Arranger and Dealer  HSBC  Dealers  ABN AMRO
  
  Banc of America Securities LimitedBarclays Capital
  
  CitigroupDeutsche Bank
  
  Dresdner Kleinwort WassersteinMitsubishi Securities International plc
  
  National Australia Bank LimitedRBC Capital Markets
  
  The Royal Bank of Scotland  The date of this Information Memorandum is 6 December 2004


IMPORTANT NOTICES  This Information Memorandum comprises listing particulars
given in compliance with the listing rules (the Listing Rules) made
under Section 74 of FSMA for the purpose of giving information with regard
to (i) NGT and each of its subsidiary undertakings, including NGC
(together, the NGT Group) and the issue by NGT of Instruments during the
period of 12 months after the date of this Information Memorandum (the NGT
Listing Particulars) and (ii) (with the exception of the information
contained in the section entitled DESCRIPTION OF NATIONAL GRID TRANSCO
PLC, the information contained in the section entitled CONSOLIDATED
CAPITALISATION AND INDEBTEDNESS OF NATIONAL GRID TRANSCO PLC and the
information contained in paragraphs 6, 8, 10 and 13(f) and paragraphs 2, 3
and 4 (to the extent they relate to NGT) in the section entitled GENERAL
INFORMATION) NGC and each of its subsidiary undertakings (together, the NGC
Group) and the issue of Instruments by NGC during the period of 12 months
after the date of this Information Memorandum (the NGC Listing Particulars).
Accordingly, NGT accepts responsibility for the information contained in the
NGT Listing Particulars and NGC accepts responsibility for the information
contained in the NGC Listing Particulars.  To the best of the knowledge and belief of each of the
Issuers (each of which has taken all reasonable care to ensure that such is the
case), the information contained in its listing particulars is in accordance
with the facts and does not omit anything likely to affect the import of such
information. Copies of this document have been delivered for registration to
the Registrar of Companies in England and Wales in accordance with Section 83
of FSMA.  This Information Memorandum should be read and construed
together with any amendments or supplements hereto and with any other documents
incorporated by reference herein and, in relation to any Tranche (as defined
herein) of Instruments, should be read and construed together with the relevant
Pricing Supplement (as defined herein).  No person has been authorised to give any information or
to make any representation other than as contained in this Information
Memorandum in connection with the issue or sale of the Instruments and, if
given or made, any such information or representation must not be relied upon
as having been authorised by either of the Issuers or any of the Dealers or the
Arranger (as defined in Summary of the Programme).  Neither the delivery of this Information Memorandum or
any Pricing Supplement nor the offering, sale or delivery of any Instrument
shall, under any circumstances, create any implication that the information
contained in this Information Memorandum is true subsequent to the date hereof,
that there has been no change (or any event reasonably likely to involve a
change) in the affairs of either of the Issuers since the date of this
Information Memorandum or the date upon which this Information Memorandum has
been most recently amended or supplemented or that there has been no adverse
change (or any event reasonably likely to involve any adverse change) in the
financial position of either of the Issuers since the date of this Information
Memorandum or the date upon which this Information Memorandum has been most
recently amended or supplemented or that any other information supplied in
connection with the Programme is correct as of any time subsequent to the date
on which it is supplied or, if different, the date indicated in the document
containing the same.  The distribution of this Information Memorandum and the
offering, distribution or sale of the Instruments in certain jurisdictions may
be restricted by law. Persons into whose possession this Information Memorandum
or any Pricing Supplement comes are required by the Issuers, the Dealers and
the Arranger to inform themselves about and to observe
any such restriction. The Instruments have not been and will not be registered
under the United States Securities Act of 1933, as amended and will be in
bearer form and subject to U.S. tax law requirements. Subject to certain
exceptions, Instruments may not be offered, sold or delivered within the United
States or to U.S. persons. For a description of certain restrictions on offers
and sales of Instruments and on distribution of this Information Memorandum or
any Pricing Supplement, see Plan of Distribution.  Neither this Information Memorandum nor any Pricing
Supplement constitutes an offer of, or an invitation by or on behalf of the
relevant Issuer or the Dealers to subscribe for, or purchase, any Instruments.


None of the Dealers, the Arranger or the Trustee have independently verified the information contained in
this Information Memorandum. None of the Dealers, the Arranger or the Trustee
makes any representation, express or implied, or accepts any responsibility,
with respect to the accuracy or completeness of any of the information in this
Information Memorandum. Neither this Information Memorandum nor any other
financial statement is intended to provide the basis of any credit or other
evaluation and should not be considered as a recommendation by either of the
Issuers, the Trustee, the Arranger or the Dealers that any recipient of this
Information Memorandum or any other financial statements should purchase the
Instruments. Each potential purchaser of Instruments should determine for
itself the relevance of the information contained in this Information
Memorandum and its purchase of Instruments should be based upon such
investigation as it deems necessary. None of the Dealers, the Arranger or the
Trustee undertakes to review the financial condition or affairs of either of
the Issuers during the life of the arrangements contemplated by this
Information Memorandum or to advise any investor or potential investor in the
Instruments of any information coming to the attention of any of the Dealers,
the Arranger or the Trustee.  In this Information Memorandum, unless otherwise
specified or the context otherwise requires, references to Euro are to the
currency of those member states of the European Union which are participating
in European Economic and Monetary Union pursuant to the Treaty establishing the
European Community, as amended, to Japanese yen are to the lawful currency of
Japan, to £ and Sterling are to the lawful currency of the United Kingdom,
to U.S. dollars and U.S$are to the lawful currency of the United States of
America, to Canadian dollars are to the lawful currency of Canada, to Australian
dollars are to the lawful currency of Australia, to New Zealand dollars are
to the lawful currency of New Zealand, to Swedish krona are to the lawful
currency of Sweden, to Danish krone are to the lawful currency of Denmark, to
Hong Kong dollars are to the lawful currency of Hong Kong and to Swiss
francs are to the lawful currency of Switzerland.  In connection with the issue of any Tranche of
Instruments under the Programme, the Dealer (if any) which is specified in the
relevant Pricing Supplement as the Stabilising Manager (or any person acting
for the Stabilising Manager) may over-allot or effect transactions with a view
to supporting the market price of the Instruments at a level higher than that
which might otherwise prevail for a limited period. However, there may be no
obligation on the Stabilising Manager (or any agent of the Stabilising Manager)
to do this. Such stabilising, if commenced, may be discontinued at any time and
must be brought to an end after a limited period. Such stabilising shall be in
compliance with all applicable laws, regulations and rules.


DOCUMENTS INCORPORATED BY REFERENCE  This Information Memorandum should be read and construed
in conjunction with each relevant Pricing Supplement and:  1.the audited consolidated financial statements of (a) NGT
for the year ended 31 March 2004 and (b) NGC for the year ended 31 March 2004;  2.the unaudited consolidated interim financial statements
of NGT for the six months ended 30 September 2004; and  3.the most recently published audited and unaudited
consolidated financial statements of each Issuer in respect of any financial
period ending after the date of this Information Memorandum,  which shall be deemed to be incorporated in, and to form
part of, this Information Memorandum and which shall be deemed to modify or
supersede the contents of this Information Memorandum to the extent that a
statement contained in any such document is inconsistent with such contents;
provided, however, that no such document incorporated by reference or modifying
or superseding statement shall form part of the listing particulars as
contained in this Information Memorandum issued in compliance with the Listing Rules.  Any reference in this Information Memorandum to listing
particulars means this Information Memorandum excluding all information
incorporated by reference. The Issuers have confirmed that any information
incorporated by reference, including any such information to which readers of
this Information Memorandum are expressly referred, has not been and does not
need to be included in the listing particulars to satisfy the requirements of
FSMA or the Listing Rules. The Issuers believe that none of the information
incorporated herein by reference conflicts in any material respect with the
information included in the listing particulars.  SUPPLEMENTARY LISTING PARTICULARS  If at any time either of the Issuers shall be required to
prepare supplementary listing particulars pursuant to Section 81 of FSMA,
such Issuer will prepare and make available an appropriate amendment or
supplement to this Information Memorandum or a further Information Memorandum
which, in respect of any subsequent issue of Instruments to be admitted to the
Official List of the UK Listing Authority, shall constitute supplementary
listing particulars as required by the UK Listing Authority and Section 81
of FSMA.


SUMMARY OF THE PROGRAMME  The following summary is qualified in its entirety
by the remainder of this Information Memorandum.  Issuers:
  
  National Grid Transco plc (registered number 04031152)National Grid Company plc (registered number 02366977)Description:
  
  Euro Medium Term Note ProgrammeSize:
  
  Up to Euro 6,000,000,000 (or the equivalent in other currencies at the
  date of issue) aggregate nominal amount of Instruments outstanding at any one
  time.Arranger:
  
  HSBC Bank plcPrincipal Dealers:
  
  ABN AMRO Bank N.V.Banc of America Securities LimitedBarclays Bank PLCCitigroup Global Markets LimitedDeutsche Bank AG LondonDresdner Bank AG London BranchHSBC Bank plcMitsubishi Securities International plcNational Australia Bank LimitedRoyal Bank of Canada Europe LimitedThe Royal Bank of Scotland plcThe Issuers may from time to time terminate the appointment of any
  dealer under the Programme or appoint additional dealers either in respect of
  one or more Tranches or in respect of the whole Programme. References in this
  Information Memorandum to Permanent Dealers are to the persons listed above
  as Dealers and to such additional persons that are appointed as dealers in
  respect of the whole Programme (and whose appointment has not been
  terminated) and to Dealers are to all Permanent Dealers and all persons
  appointed as a dealer in respect of one or more Tranches.Trustee:
  
  The Law Debenture Trust Corporation p.l.c.Issuing and Paying Agent:
  
  JPMorgan Chase Bank, N.A.Other Paying Agent:
  
  Kredietbank S.A. LuxembourgeoiseMethod of Issue:
  
  The Instruments will be issued on a syndicated or non-syndicated basis.
  The Instruments will be issued in series (each a Series) having one or more
  issue dates and on terms otherwise identical (or identical other than in
  respect of the first payment of interest), the Instruments of each
  Series being intended to be interchangeable with all other Instruments
  of that Series. Each Series may be issued in tranches (each a Tranche)
  on the same or different issue dates. The specific terms of each Tranche
  (which will be supplemented, where necessary, with supplemental terms and
  conditions and, save in respect of the issue date, issue price, first payment
  of interest and nominal amount of the Tranche, will be identical to the terms
  of other Tranches of the same Series) will be set out in a pricing supplement
  to this Information Memorandum (a Pricing Supplement).Issue Price:
  
  Instruments may be issued at their nominal amount or at a discount or
  premium to their nominal amount. Partly Paid Instruments may be issued, the
  issue price of which will be payable in two or more instalments.


Form of Instruments:
  
  The Instruments may be issued in bearer form only. Each Tranche of
  Instruments will be represented on issue by a temporary Global Instrument if
  (a) definitive Instruments are to be made available to Instrumentholders
  following the expiry of 40 days after their issue date or (b) such
  Instruments have an initial maturity of more than one year and are being
  issued in compliance with the D Rules (as defined in Summary of the
  Programme  Selling Restrictions), otherwise such Tranche will be
  represented by a permanent Global Instrument. Any permanent Global Instrument
  shall only be exchanged for Instruments in definitive form in the limited
  circumstances set out in the permanent Global Instrument.Clearing Systems:
  
  Clearstream, Luxembourg, Euroclear and, in relation to any Tranche, such
  other clearing system as may be agreed between the relevant Issuer, the
  Issuing and Paying Agent, the Trustee and the relevant Dealer.Initial Delivery of Instruments:
  
  On or before the issue date for each Tranche, the Global Instrument
  representing the relevant Instruments may be deposited with a common
  depositary for Euroclear and Clearstream, Luxembourg. Global Instruments may
  also be deposited with any other clearing system or may be delivered outside
  any clearing system provided that the method of such delivery has been agreed
  in advance by the relevant Issuer, the Issuing and Paying Agent, the Trustee
  and the relevant Dealer.Currencies:
  
  Subject to compliance with all relevant laws, regulations and
  directives, Instruments may be issued in Euro, Japanese yen, Sterling, U.S.
  dollars, Canadian dollars, Australian dollars, New Zealand dollars, Swedish
  krona, Danish krone, Hong Kong dollars or Swiss francs or in other currencies
  if the relevant Issuer and the relevant Dealer(s) so agree. Instruments may,
  subject to compliance as above, be issued as dual currency Instruments.Maturities:
  
  Subject to compliance with all relevant laws, regulations and
  directives, any maturity from one month to perpetuity.Any Instruments having a maturity of less than one year from their date
  of issue must (a) have a minimum redemption value of £100,000 (or its
  equivalent in other currencies) and be issued only to persons whose ordinary
  activities involve them in acquiring, holding, managing or disposing of
  investments (as principal or agent) for the purposes of their businesses or who
  it is reasonable to expect will acquire, hold, manage or dispose of
  investments (as principal or agent) for the purposes of their businesses or
  (b) be issued in other circumstances which do not constitute a
  contravention of Section 19 of FSMA by the relevant Issuer.Denominations:
  
  Definitive Instruments will be in such denominations as may be specified
  in the relevant Pricing Supplement, save that unless otherwise permitted by
  then current laws and regulations, Instruments which have a maturity of less
  than one year will have a minimum denomination of £100,000 (or its equivalent
  in other currencies).Fixed Rate Instruments:
  
  Fixed interest will be payable in arrear on the date or dates in each
  year specified in the relevant Pricing Supplement and at maturity.Floating Rate Instruments:
  
  Floating Rate Instruments will bear interest set separately for each
  Series as follows:(a)on the same basis as the floating
  rate under a notional interest rate swap transaction in the relevant Specified
  Currency governed by an agreement incorporating the 2000 ISDA Definitions
  published by the International Swaps and Derivatives Association, Inc.
  or(b)by reference to LIBOR, LIBID, LIMEAN or
  EURIBOR (or such other benchmark as may be specified in the relevant Pricing
  Supplement) as adjusted for any applicable margin. Interest periods will be
  selected by the relevant Issuer prior to issue and specified in the relevant
  Pricing


Supplement. Floating Rate
  Instruments may also have a maximum interest rate, a minimum interest rate,
  or both.Zero Coupon Instruments:
  
  Zero Coupon Instruments may be issued at their nominal amount or at a
  discount to it and will not bear interest.Dual Currency Instruments:
  
  Payments (whether in respect of principal or interest and whether at
  maturity or otherwise) in respect of Dual Currency Instruments will be made
  in such currencies, and based on such rates of exchange as may be specified
  in the relevant Pricing Supplement.Index Linked Instruments:
  
  Payments of principal in respect of Index Linked Redemption Instruments
  or of interest in respect of Index Linked Interest Instruments will be
  calculated by reference to such index and/or formula as may be specified in
  the relevant Pricing Supplement.Interest Periods and Rates of Interest:
  
  The length of the interest periods for the Instruments and the
  applicable interest rate or its method of calculation may differ from time to
  time or be constant for any Series. Instruments may have a maximum interest
  rate, a minimum interest rate, or both. The use of interest accrual periods
  permits the Instruments to bear interest at different rates in the same
  interest period. All such information will be set out in the relevant Pricing
  Supplement.Redemption:
  
  The relevant Pricing Supplement will specify the basis for calculating
  the redemption amounts payable, which may be by reference to a stock index or
  formula or as otherwise provided in the relevant Pricing Supplement.Unless permitted by then current laws and regulations, Instruments which
  have a maturity of less than one year must have a minimum redemption amount
  of £100,000 (or its equivalent in other currencies).Redemption by Instalments:
  
  The Pricing Supplement issued in respect of each issue of Instruments
  that are redeemable in two or more instalments will set out the dates on
  which, and the amounts in which, such Instruments may be redeemed.Other Instruments:
  
  Terms applicable to high interest Instruments, low interest Instruments,
  step-up Instruments, step-down Instruments, dual currency Instruments,
  reverse dual currency Instruments, optional dual currency Instruments,
  partly-paid Instruments and any other type of Instrument that the relevant
  Issuer, the Trustee and any Dealer(s) may agree to issue under the Programme,
  subject to compliance with all relevant laws, regulations and directives,
  will be set out in the relevant Pricing Supplement.Optional Redemption:
  
  The Pricing Supplement issued in respect of each issue of Instruments
  will state whether such Instruments may be redeemed prior to their stated
  maturity at the option of the relevant Issuer (either in whole or in part)
  and/or the holders, and if so the terms applicable to such redemption.Redemption at the Option of the Instrumentholders following an NGT
  Restructuring Event, or as the case may be, an NGC Restructuring Event (each as
  defined in Condition 4.6.2):
  
  Instruments issued by NGT will be subject to an optional redemption by Instrumentholders
  following a Put Event (as defined in Condition 4.6.1). Instruments
  issued by NGC will, if so specified in the relevant Pricing Supplement, be
  subject to an optional redemption by Instrumentholders following a Put Event
  (as defined in Condition 4.6.1).If at any time while any relevant Instrument remains outstanding, a Put
  Event occurs then (other than in certain circumstances described in Condition
  4.6.1) the Instrumentholders will, upon the giving of a Put Event Notice (as
  defined in Condition 4.6.1), have the option to require the relevant Issuer
  to redeem the relevant Instrument on the Put Date (as defined in Condition
  4.6.4) at the principal amount of the Instrument together with accrued
  interest to the Put Date.


Status of Istruments:
  
  The Instruments will constitute unsubordinated and unsecured obligations
  of the relevant Issuer, all as described in Terms and Conditions of the
  Instruments  Status.Negative Pledge:
  
  Instruments issued by NGT will have the benefit of a negative pledge as
  described in Terms and Conditions of the Instruments  Status and Negative
  Pledge.Instruments issued by NGC will not have the benefit of a negative
  pledge.Cross Acceleration:
  
  The Instruments will have the benefit of a cross acceleration provision
  as described in Terms and Conditions of the Instruments  Events of
  Default.Events of Default:
  
  The events of default under the Instruments are as specified below under
  Terms and Conditions of the Instruments  Events of Default.Early Redemption:
  
  Except as provided in Optional Redemption above, Instruments will be
  redeemable at the option of the relevant Issuer prior to maturity only for
  tax reasons. See Terms and Conditions of the Instruments  Redemption,
  Purchase and Options.Withholding Tax:
  
  All payments of principal and interest in respect of the Instruments
  will be made free and clear of withholding taxes of the United Kingdom
  subject to customary exceptions, all as described in Terms and Conditions of
  the Instruments  Taxation.Governing Law:
  
  EnglishListing:
  
  Each Series may be admitted to the Official List of the UK Listing
  Authority and admitted to trading on the London Stock Exchange and/or
  admitted to listing, trading and/or quotation by any other listing authority,
  stock exchange and/or quotation system as may be agreed between the relevant
  Issuer and the relevant Dealer(s) and specified in the relevant Pricing
  Supplement or may be unlisted.Selling Restrictions:
  
  United States, United Kingdom and Japan. See Plan of Distribution.Category 2 selling restrictions will apply to the Instruments for the
  purposes of Regulation S under the Securities Act.The Instruments will be issued in compliance with U.S. Treas. Reg.
  11.163-5(c)(2)(i)(D) (the D Rules) unless (a) the relevant
  Pricing Supplement states that Instruments are issued in compliance with U.S.
  Treas. Reg. 11.163-5(c)(2)(i)(C) (the C Rules) or
  (b) the Instruments are issued other than in compliance with the D
  Rules or the C Rules but in circumstances in which the Instruments
  will not constitute registration required obligations under the United
  States Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA), which
  circumstances will be referred to in the relevant Pricing Supplement as a
  transaction to which TEFRA is not applicable.Terms and Conditions:
  
  The Terms and Conditions applicable to each Series will be as
  agreed between the relevant Issuer, the Trustee and the relevant Dealer(s) or
  other subscriber at or prior to the time of issuance of such Series and
  will be specified in the relevant Pricing Supplement. The Terms and
  Conditions applicable to each Series will therefore be those as set out
  on pages 10 to 33 (inclusive) of this Information Memorandum as
  supplemented, modified or replaced by the relevant Pricing Supplement.


TERMS AND CONDITIONS OF THE INSTRUMENTS  The following is the text of the terms and
conditions which, subject to completion and amendment and as supplemented or
varied in accordance with the provisions of the relevant Pricing Supplement,
will be endorsed on the Instruments in definitive form (if any) issued in
exchange for the Global Instrument(s) representing each Series. Either (a) the
full text of these terms and conditions together with the relevant provisions
of the Pricing Supplement or (b) these terms and conditions as so
completed, amended, supplemented or varied (and subject to simplification by
the deletion of non-applicable provisions), shall be endorsed on such
Instruments. All capitalised terms which are not defined in these Conditions
will have the meanings given to them in the Trust Deed or the relevant Pricing
Supplement. Those definitions will be endorsed on the definitive Instruments.  References in these terms and conditions to Instruments
(as defined below) are to the Instruments of one Series only of the
relevant Issuer (as defined below), not to all Instruments that may be issued
under the Programme.  National Grid Transco plc (NGT) and National Grid
Company plc (NGC) (each an Issuer and together, the Issuers) have
established a Euro Medium Term Note Programme (the Programme) for the
issuance of up to Euro 6,000,000,000 in aggregate principal amount of debt
instruments (the Instruments). The Instruments are constituted by a Trust
Deed (as amended or supplemented from time to time, the Trust Deed) dated
6 December 2004 between the Issuers and The Law Debenture Trust
Corporation p.l.c. (the Trustee, which expression shall include all persons
for the time being the trustee or trustees under the Trust Deed) as trustee for
the Instrumentholders (as defined below). These terms and conditions include
summaries of, and are subject to, the detailed provisions of the Trust Deed,
which includes the form of the Definitive Instruments, Receipts, Coupons and
Talons referred to below. An Agency Agreement (as amended or supplemented from
time to time, the Agency Agreement) dated 6 December 2004 has been
entered into in relation to the Instruments between the Issuers, the Trustee,
JPMorgan Chase Bank, N.A. as initial issuing and paying agent and the other
agent(s) named in it. The issuing and paying agent, the paying agent(s) and the
calculation agent(s) for the time being (if any) are referred to below
respectively as the Issuing and Paying Agent, the Paying Agents (which
expression shall include the Issuing and Paying Agent) and the Calculation
Agent(s). Copies of the Trust Deed and the Agency Agreement are available for
inspection during usual business hours at the registered office of the Trustee
(presently at Fifth Floor, 100 Wood Street, London EC2V 7EX) and at the
specified offices of the Paying Agents.  The Instrumentholders, the holders of the interest
coupons (the Coupons) appertaining to interest bearing Instruments and, where
applicable in the case of such Instruments, talons for further Coupons (the Talons)
(the Couponholders) and the holders of the receipts for the payment of
instalments of principal (the Receipts) relating to Instruments of which the
principal is payable in instalments are entitled to the benefit of, are bound
by, and are deemed to have notice of, all the provisions of the Trust Deed and
are deemed to have notice of those provisions of the Agency Agreement
applicable to them.  1.Form, Denomination and Title  The Instruments are issued in bearer form in the
Specified Denomination(s) specified in the relevant Pricing Supplement and are
serially numbered. Instruments of one Specified Denomination are not
exchangeable for Instruments of another Specified Denomination.  This Instrument is a Fixed Rate Instrument, a Floating
Rate Instrument, a Zero Coupon Instrument, a Perpetual Instrument, an Index
Linked Interest Instrument, an Index Linked Redemption Instrument, an
Instalment Instrument, a Dual Currency Instrument or a Partly Paid Instrument,
a combination of any of the preceding or any other kind of Instrument,
depending upon the Interest and Redemption/Payment Basis specified in the
relevant Pricing Supplement.  Instruments are issued with Coupons (and, where
appropriate, a Talon) attached, save in the case of Zero Coupon Instruments in
which case references to interest (other than in relation to interest due after
the Maturity Date), Coupons and Talons in these Conditions are not applicable.  Instalment Instruments are issued with one or more
Receipts attached. Title to the Instruments and the Receipts, Coupons and
Talons shall pass by delivery and except as ordered by a court of competent
jurisdiction or as required by law, the Issuer and the Paying Agents shall be
entitled to treat the bearer of any Instrument, Receipt, Coupon or Talon as the
absolute owner of that Instrument, Receipt, Coupon or Talon, as the case may
be, and shall not be required to obtain any proof of ownership as to the identity
of the bearer.  In these Conditions, Instrumentholder means the bearer
of any Instrument of one Series only of an Issuer and the Receipts
relating to it, holder (in relation to an Instrument, Receipt, Coupon or
Talon) means the bearer of


any Instrument, Receipt, Coupon or Talon
and capitalised terms have the meanings given to them herein, the absence of
any such meaning indicating that such term is not applicable to the
Instruments.  2.Status and Negative Pledge  2.1Status  The Instruments and
the Receipts and Coupons relating to them constitute direct, unconditional and
unsecured obligations of the Issuer and rank pari passu
without any preference or priority among themselves. The payment obligations of
the Issuer under the Instruments, Receipts and Coupons shall, subject to such
exceptions as are from time to time applicable under the laws of England and,
in relation to Instruments issued by NGT, as provided in Condition 2.2, rank
equally with all other present and future unsecured obligations (other than
subordinated obligations, if any) of the Issuer.  2.2Negative Pledge  So long as any
Instrument, Receipt or Coupon of NGT remains outstanding (as defined in the
Trust Deed) NGT will not create or permit to subsist any mortgage, charge, pledge,
lien or other form of encumbrance or security interest (Security) upon the
whole or any part of its undertaking, assets or revenues present or future to
secure any Relevant Indebtedness, or any guarantee of or indemnity in respect
of any Relevant Indebtedness unless, at the same time or prior thereto, NGTs
obligations under the Instruments, the Receipts, the Coupons and the Trust Deed
(a) are secured equally and rateably therewith or benefit from a guarantee
or indemnity in substantially identical terms thereto, as the case may be, in
each case to the satisfaction of the Trustee, or (b) have the benefit of
such other security, guarantee, indemnity or other arrangement as the Trustee
in its absolute discretion shall deem to be not materially less beneficial to
the Instrumentholders or as shall be approved by an Extraordinary Resolution
(as defined in the Trust Deed) of the Instrumentholders.  For the purposes of
these Conditions, Relevant Indebtedness means any present or future
indebtedness in the form of, or represented by, bonds, notes, debentures, loan
stock or other securities which are for the time being, or are intended, with
the agreement of the Issuer, to be quoted, listed or ordinarily dealt in on any
stock exchange.  3.Interest  3.1Interest on Fixed Rate Instruments  Each Fixed Rate
Instrument bears interest on its outstanding nominal amount from the Interest
Commencement Date at the rate per annum (expressed as a percentage) equal to
the Rate of Interest, payable in arrear on each Interest Payment Date.  If a Fixed Coupon
Amount or a Broken Amount is specified in the relevant Pricing Supplement, the
amount of interest payable on each Interest Payment Date will amount to the
Fixed Coupon Amount, or, if applicable, the Broken Amount so specified and in
the case of a Broken Amount will be payable on the particular Interest Payment
Date(s) specified in the relevant Pricing Supplement.  3.2Interest on Floating Rate
Instruments and Index Linked Interest Instruments  3.2.1Interest Payment Dates:Each Floating Rate Instrument and Index
Linked Interest Instrument bears interest on its outstanding nominal amount
from the Interest Commencement Date at the rate per annum (expressed as a
percentage) equal to the Rate of Interest, such interest being payable in
arrear on each Interest Payment Date. Such Interest Payment Date(s) is/are
either specified in the relevant Pricing Supplement as Specified Interest
Payment Dates or, if no Specified Interest Payment Date(s) is/are specified in
the relevant Pricing Supplement, Interest Payment Date shall mean each date
which falls the number of months or other period shown on this Instrument as
the Interest Period after the preceding Interest Payment Date or, in the case
of the first Interest Payment Date, after the Interest Commencement Date.  3.2.2Business Day Convention: If any date which is specified to be subject to adjustment in accordance
with a Business Day Convention would otherwise fall on a day which is not a
Business Day, then, if the Business Day Convention specified is (a) the
Floating Rate Convention, such date shall be postponed to the next day which is
a Business Day unless it would then fall into the next calendar month, in which
event (x) such date shall be brought forward to the immediately preceding
Business Day and (y) each subsequent such date shall be the last Business Day
of the month in which such date


would have fallen had
it not been subject to adjustment, (b) the Following Business Day
Convention, such date shall be postponed to the next day which is a Business
Day, (c) the Modified Following Business Day Convention, such date shall
be postponed to the next day which is a Business Day unless it would then fall
into the next calendar month, in that event such date shall be brought forward
to the immediately preceding Business Day or (d) the Preceding Business
Day Convention, such date shall be brought forward to the immediately preceding
Business Day.  3.2.3Rate of Interest for Floating Rate Instruments:The Rate of Interest in respect of
Floating Rate Instruments for each Interest Accrual Period shall be determined
in the manner specified in the relevant Pricing Supplement and the provisions
below relating to either ISDA Determination or Screen Rate Determination shall
apply, depending upon which is specified on this Instrument.  (a)ISDA Determination for Floating Rate Instruments:Where ISDA Determination is specified
in the relevant Pricing Supplement as the manner in which the Rate of Interest
is to be determined, the Rate of Interest for each
Interest Accrual Period shall be determined by the Calculation Agent as a rate
equal to the relevant ISDA Rate. For the purposes of this sub-paragraph (a), ISDA
Rate for an Interest Accrual Period means a rate equal to the Floating Rate which
would be determined by the Calculation Agent under a Swap Transaction under the
terms of an agreement incorporating the ISDA Definitions and under which:  (i)the Floating Rate Option is as specified in the
relevant Pricing Supplement;  (ii)the Designated Maturity is a period specified in the
relevant Pricing Supplement; and  (iii)the relevant Reset Date is the first day of that
Interest Accrual Period unless otherwise specified in the relevant Pricing
Supplement.  For the purposes of
this sub-paragraph (a), Floating Rate, Calculation Agent, Floating Rate
Option, Designated Maturity, Reset Date and Swap Transaction have the
meanings given to those terms in the ISDA Definitions.  (b)Screen Rate Determination for Floating Rate Instruments:Where Screen Rate Determination is
specified in the relevant Pricing Supplement as the manner in which the Rate of
Interest is to be determined, the Rate of Interest for each Interest Accrual
Period shall be determined by the Calculation Agent at or about the Relevant
Time on the Interest Determination Date in respect of such Interest Accrual
Period in accordance with the following:  (i)if the Primary Source for Floating Rate is a Page, subject as provided
below, the Rate of Interest shall be:  (1)the Relevant Rate (where such Relevant Rate on such Page is
a composite quotation or is customarily supplied by one entity); or  (2)the arithmetic mean of the Relevant Rates of the
persons whose Relevant Rates appear on that Page,  in each case appearing on such Page at
the Relevant Time on the Interest Determination Date;  (ii)if the Primary Source for the Floating Rate is Reference Banks or if
sub-paragraph (i)(1) applies and no Relevant Rate appears on the Page at
the Relevant Time on the Interest Determination Date or if sub-paragraph (i)(2) above
applies and fewer than two Relevant Rates appear on the Page at the
Relevant Time on the Interest Determination Date, subject as provided below,
the Rate of Interest shall be the arithmetic mean of the Relevant Rates that
each of the Reference Banks is quoting to leading banks in the Relevant
Financial Centre at the Relevant Time on the Interest Determination Date, as
determined by the Calculation Agent; and  (iii)if paragraph (ii) above applies and the Calculation Agent determines
that fewer than two Reference Banks are so quoting Relevant Rates, subject as
provided below, the Rate of Interest shall be the arithmetic mean of the rates
per annum (expressed as a percentage) that the Calculation Agent determines to
be the rates (being the nearest equivalent to the Benchmark) in respect of a
Representative Amount of the Specified Currency that at least two out of five
leading banks selected by the Calculation Agent in the principal financial
centre of the country of the Specified Currency or, if the Specified Currency
is Euro in


those member states of
the European Union which are participating in European economic and monetary
union as selected by the Calculation Agent (the Principal Financial Centre)
are quoting at or about the Relevant Time on the date on which such banks would
customarily quote such rates for a period commencing on the Effective Date for
a period equivalent to the Specified Duration (1) to leading banks
carrying on business in Europe, or (if the Calculation Agent determines that
fewer than two of such banks are so quoting to leading banks in Europe) (2) to
leading banks carrying on business in the Principal Financial Centre; except
that, if fewer than two of such banks are so quoting to leading banks in the
Principal Financial Centre, the Rate of Interest shall be the Rate of Interest
determined on the previous Interest Determination Date (after readjustment for
any difference between any Margin, Rate Multiplier or Maximum or Minimum Rate
of Interest applicable to the preceding Interest Accrual Period and to the
relevant Interest Accrual Period).  3.2.4Rate of Interest for Index Linked Interest Instruments: The Rate of Interest in respect of
Index Linked Interest Instruments for each Interest Accrual Period shall be
determined in the manner specified in the relevant Pricing Supplement and
interest will accrue by reference to an Index or Formula as specified in the
relevant Pricing Supplement.  (a)Zero Coupon Instruments:Where an Instrument, the Interest Basis of which is specified to be Zero
Coupon, is repayable prior to the Maturity Date and is not paid when due, the
amount due and payable prior to the Maturity Date shall be the Early Redemption
Amount of such Instrument. As from the Maturity Date, the Rate of Interest for
any overdue principal of such an Instrument shall be a rate per annum
(expressed as a percentage) equal to the Amortisation Yield (as defined in
Condition 4.4.1(b)).  (b)Dual Currency Instruments:In the case of Dual Currency Instruments, if the
rate or amount of interest falls to be determined by reference to a Rate of
Exchange or a method of calculating a Rate of Exchange, the rate or amount of
interest payable shall be determined in the manner specified in the relevant
Pricing Supplement.  (c)Partly Paid Instruments:In the case of Partly Paid Instruments (other than Partly Paid Instruments
which are Zero Coupon Instruments), interest will accrue as previously stated
on the paid-up nominal amount of such Instruments and otherwise as specified in
the relevant Pricing Supplement.  (d)Accrual of Interest:Interest shall cease to accrue on each Instrument on the due date for
redemption unless, upon due presentation, payment is improperly withheld or
refused, in which event interest shall continue to accrue (as well after as
before judgment) at the Rate of Interest in the manner provided in this
Condition 3 to the Relevant Date (as defined in Condition 6).  (e)Margin,Maximum/Minimum Rates of Interest, Instalment Amounts and
Redemption Amounts, Rate Multipliers and Rounding:  (i)If any Margin or Rate Multiplier is specified in the relevant Pricing
Supplement (either (x) generally, or (y) in relation to one or more Interest
Accrual Periods), an adjustment shall be made to all Rates of Interest, in the
case of (x), or the Rates of Interest for the specified Interest Accrual
Periods, in the case of (y), calculated in accordance with Condition 3.2.3(b) above,
by adding (if a positive number) or subtracting (if a negative number) the absolute
value of such Margin or multiplying by such Rate Multiplier, subject always to
the next paragraph.  (ii)If any Maximum or Minimum Rate of Interest, Instalment Amount or
Redemption Amount is specified in the relevant Pricing Supplement, then any
Rate of Interest, Instalment Amount or Redemption Amount shall be subject to
such maximum or minimum, as the case may be.  (iii)For the purposes of any calculations required pursuant to these Conditions
(unless otherwise specified), (x) all percentages resulting from such
calculations shall be rounded, if necessary, to the nearest one
hundred-thousandth of a percentage point (with halves being rounded up), (y)
all figures shall be rounded to seven significant figures (with halves being
rounded up) and (z) all currency amounts that fall due and payable shall be
rounded to the nearest unit of such currency (with halves being rounded up),
save in the


case of
yen, which shall be rounded down to the nearest yen. For these purposes unit
means the lowest amount of such currency which is available as legal tender in
the country of such currency.  (f)Calculations: The amount of interest payable in respect of any
Instrument for any period shall be calculated by multiplying the product of the
Rate of Interest and the outstanding nominal amount of such Instrument by the
Day Count Fraction, unless an Interest Amount (or a formula for its
calculation) is specified in the relevant Pricing Supplement in respect of such
period, in which case the amount of interest payable in respect of such
Instrument for such period shall equal such Interest Amount (or be calculated
in accordance with such formula). Where any Interest Period comprises two or
more Interest Accrual Periods, the amount of interest payable in respect of such
Interest Period shall be the sum of the amounts of interest payable in respect
of each of those Interest Accrual Periods.  (g)Determination and Publication of Rates of Interest, Interest Amounts,
Final Redemption Amounts, Early Redemption Amounts, Optional Redemption Amounts
and Instalment Amounts:As soon as practicable after the Relevant Time on each Interest
Determination Date or such other time on such date as the Calculation Agent may
be required to calculate any rate or amount, obtain any quotation or make any
determination or calculation, it shall determine such rate and calculate the
Interest Amounts in respect of each Specified Denomination of the Instruments
for the relevant Interest Accrual Period, calculate the Redemption Amount or
Instalment Amount, obtain such quote or make such determination or calculation,
as the case may be, and cause the Rate of Interest and the Interest Amounts for
each Interest Period and the relevant Interest Payment Date and, if required to
be calculated, the Final Redemption Amount, Early Redemption Amount, Optional
Redemption Amount or any Instalment Amount to be notified to the Trustee, the
Issuer, each of the Paying Agents, the Instrumentholders, any other Calculation
Agent appointed in respect of the Instruments that is to make a further
calculation upon receipt of such information and, if the Instruments are listed
on a stock exchange and the rules of such exchange so require, such
exchange as soon as possible after their determination but in no event later
than (i) the commencement of the relevant Interest Period, if determined
prior to such time, in the case of notification to such exchange of a Rate of
Interest and Interest Amount, or (ii) in all other cases, the fourth
Business Day after such determination. Where any Interest Payment Date or
Interest Period Date is subject to adjustment pursuant to Condition 3.2.3(b)(ii), the Interest Amounts and the Interest Payment Date so
published may subsequently be amended (or appropriate alternative arrangements
made with the consent of the Trustee by way of adjustment) without notice in
the event of an extension or shortening of the Interest Period. If the
Instruments become due and payable under Condition 8, the accrued interest and
the Rate of Interest payable in respect of the Instruments shall nevertheless
continue to be calculated as previously in accordance with this Condition but
no publication of the Rate of Interest or the Interest Amount so calculated
need be made unless the Trustee otherwise requires. The determination of any
rate or amount, the obtaining of each quotation and the making of each
determination or calculation by the Calculation Agent(s) shall (in the absence
of manifest error) be final and binding upon all parties.  (h)Determination or Calculation by Trustee:If the Calculation Agent does not at any time for
any reason determine or calculate the Rate of Interest for an Interest Period
or any Interest Amount, Instalment Amount, Final Redemption Amount, Early
Redemption Amount or Optional Redemption Amount the Trustee shall do so (or
shall appoint an agent on its behalf to do so) and such determination or
calculation shall be deemed to have been made by the Calculation Agent. In
doing so, the Trustee shall apply the preceding provisions of this Condition,
with any necessary consequential amendments, to the extent that, in its
opinion, it can do so, and, in all other respects it shall do so in such manner
as it shall deem fair and reasonable in all the circumstances.  3.2.5Definitions:
In these Conditions, unless the context otherwise requires, the following
defined terms shall have the meanings set out below:  Business Day means:  (a)in the case of a currency other than Euro, a day (other than a Saturday or
Sunday) on which commercial banks and foreign exchange markets settle payments
in the principal financial centre for such currency; and/or


(b)in the case of Euro, a day on which the TARGET System is operating (a TARGET
Business Day); and/or  (c)in the case of a currency and/or one or more Business Centres as specified
in the relevant Pricing Supplement, a day (other than a Saturday or a Sunday)
on which commercial banks and foreign exchange markets settle payments in such
currency or, if no currency is indicated, generally in each of the Business
Centres.  Day Count Fraction
means, in respect of the calculation of an amount of interest on any Instrument
for any period of time (from and including the first day of such period to but
excluding the last) (whether or not constituting an Interest Period, the Calculation
Period):  (a)if Actual/365 or Actual/Actual-ISDA is specified in the relevant
Pricing Supplement, the actual number of days in the Calculation Period divided
by 365 (or, if any portion of that Calculation Period falls in a leap year, the
sum of (i) the actual number of days in that portion of the Calculation
Period falling in a leap year divided by 366 and (ii) the actual number of
days in that portion of the Calculation Period falling in a non-leap year
divided by 365);  (b)if Actual/365 (Fixed) is specified in the relevant Pricing Supplement, the
actual number of days in the Calculation Period divided by 365;  (c)if Actual/360 is specified in the relevant Pricing Supplement, the actual
number of days in the Calculation Period divided by 360;  (d)if 30/360, 360/360 or Bond Basis is specified in the relevant
Pricing Supplement, the number of days in the Calculation Period divided by 360
(the number of days to be calculated on the basis of a year of 360 days with 12
30-day months (unless (i) the last day of the Calculation Period is
the 31st day of a month but the first day of the Calculation Period is a day
other than the 30th or 31st day of a month, in which case the month that
includes that last day shall not be considered to be shortened to a 30-day
month, or (ii) the last day of the Calculation Period is the last day of
the month of February, in which case the month of February shall not be
considered to be lengthened to a 30-day month);  (e)if 30E/360 or Eurobond Basis is specified in the relevant Pricing
Supplement, the number of days in the Calculation Period divided by 360 (the
number of days to be calculated on the basis of a year of 360 days with 12 30-day
months, without regard to the date of the first day or last day of the
Calculation Period unless, in the case of a Calculation Period ending on the
Maturity Date, the Maturity Date is the last day of the month of February, in
which case the month of February shall not be considered to be lengthened
to a 30-day month); and  (f)if Actual/Actual-ISMA is specified in the relevant Pricing Supplement:  (i)if the Calculation Period is equal to or shorter than the Determination
Period during which it falls, the actual number of days in the Calculation
Period divided by the product of (x) the actual number of days in such
Determination Period and (y) the number of Determination Periods in any year;
and  (ii)if the Calculation Period is longer than one Determination Period, the sum
of:  (1)the actual number of days in such Calculation Period falling in the
Determination Period in which it begins divided by the product of (a) the
actual number of days in such Determination Period and (b) the number of
Determination Periods in any year; and  (2)the actual number of days in such Calculation Period falling in the next
Determination Period divided by the product of (a) the actual number of
days in such Determination Period and (b) the number of Determination
Periods in any year,  where:  Determination Period
means the period from and including a Determination Date in any year to but
excluding the next Determination Date; and  Determination Date
means the date specified as such in the relevant Pricing Supplement or, if none
is so specified, the Interest Payment Date.


Effective Date
means, with respect to any Floating Rate to be determined on an Interest
Determination Date, the date specified as such in the relevant Pricing
Supplement or, if none is so specified, the first day of the Interest Accrual
Period to which such Interest Determination Date relates.  Euro-zone means the
region comprising of member states of the European Union that adopt the single
currency in accordance with the Treaty establishing the European Community as
amended.  Interest Accrual
Period means the period beginning on (and including) the Interest Commencement
Date and ending on (but excluding) the first Interest Period Date and each
successive period beginning on (and including) an Interest Period Date and
ending on (but excluding) the next succeeding Interest Period Date.  Interest Amount
means the amount of interest payable, and in the case of Fixed Rate
Instruments, means the Fixed Coupon Amount or Broken Amount, as the case may
be.  Interest Commencement
Date means the Issue Date or such other date as may be specified in the
relevant Pricing Supplement.  Interest
Determination Date means, with respect to a Rate of Interest and Interest
Accrual Period, the date specified as such in the relevant Pricing Supplement
or, if none is so specified, (a) the first day of such Interest Accrual
Period if the Specified Currency is Sterling or (b) the day falling two
Business Days in London prior to the first day of such Interest Accrual Period
if the Specified Currency is neither Sterling nor Euro or (c) the day
falling two TARGET Business Days prior to the first day of such Interest
Accrual Period if the Specified Currency is Euro.  Interest Payment Date
means the date or dates specified as such in, or determined in accordance with
the provisions of, the relevant Pricing Supplement and, if a Business Day
Convention is specified in the relevant Pricing Supplement, as the same may be
adjusted in accordance with the relevant Business Day Convention.  Interest Period
means the period beginning on (and including) the Interest Commencement Date
and ending on (but excluding) the first Interest Payment Date and each
successive period beginning on (and including) an Interest Payment Date and
ending on (but excluding) the next succeeding Interest Payment Date.  Interest Period Date
means each Interest Payment Date unless otherwise specified in the relevant
Pricing Supplement.  ISDA Definitions
means the 2000 ISDA Definitions as published by the International Swaps and
Derivatives Association, Inc., unless otherwise specified in the relevant
Pricing Supplement.  Page means such
page, section, caption, column or other part of a particular information
service (including, but not limited to, the Reuters Market 3000 (Reuters) and
the Telerate Service (Telerate)) as may be specified for the purpose of
providing a Relevant Rate, or such other page, section, caption, column or
other part as may replace it on that information service or on such other
information service, in each case as may be nominated by the person or
organisation providing or sponsoring the information appearing there for the
purpose of displaying rates or prices comparable to that Relevant Rate.  Rate of Interest
means the rate of interest payable from time to time in respect of this
Instrument and that is either specified on, or calculated in accordance with
the provisions of, the relevant Pricing Supplement.  Redemption Amount
means, as appropriate, the Final Redemption Amount, the Early Redemption Amount
(Tax), the Optional Redemption Amount (Call), the Optional Redemption Amount
(Put), the Early Termination Amount or such other amount in the nature of a
redemption amount as may be specified in, or determined in accordance with the
provisions of the relevant Pricing Supplement.  Reference Banks
means the institutions specified as such in the relevant Pricing Supplement or,
if none, five leading banks selected by the Calculation Agent in the interbank
market (or, if appropriate, money, swap or over-the-counter index options
market) that is most closely connected with the Benchmark (which, if EURIBOR is
the relevant Benchmark, shall be Europe).  Relevant Financial
Centre means, with respect to any Floating Rate to be determined in accordance
with a Screen Rate Determination on an Interest Determination Date, the
financial centre as may be


specified as such in the relevant Pricing Supplement or, if none is so specified,
the financial centre with which the relevant Benchmark is most closely
connected (which, in the case of EURIBOR, shall be Europe) or, if none is so
connected, London.  Relevant Rate means
the Benchmark for a Representative Amount of the Specified Currency for a
period (if applicable or appropriate to the Benchmark) equal to the Specified
Duration commencing on the Effective Date.  Relevant Time means,
with respect to any Interest Determination Date, the local time in the Relevant
Financial Centre specified in the relevant Pricing Supplement or, if no time is
specified, the local time in the Relevant Financial Centre at which it is
customary to determine bid and offered rates in respect of deposits in the
Specified Currency in the interbank market in the Relevant Financial Centre or,
if no such customary local time exists, 11.00 hours in the Relevant Financial
Centre and, for the purpose of this definition local time means, with respect
to Europe as a Relevant Financial Centre, Brussels time.  Representative Amount
means, with respect to any Floating Rate to be determined in accordance with a
Screen Rate Determination on an Interest Determination Date, the amount
specified as such in the relevant Pricing Supplement or, if none is specified,
an amount that is representative for a single transaction in the relevant
market at the time.  Specified Currency
means the currency specified as such in the relevant Pricing Supplement or, if
none is specified, the currency in which the Instruments are denominated.  Specified Duration
means, with respect to any Floating Rate to be determined in accordance with a
Screen Rate Determination on an Interest Determination Date, the duration
specified in the relevant Pricing Supplement or, if none is specified, a period
of time equal to the relevant Interest Accrual Period, ignoring any adjustment
pursuant to Condition 3.2.3(b)(ii).  TARGET System means
the Trans-European Automated Real-Time Gross Settlement Express Transfer
(TARGET) System or any successor to it.  3.2.6Calculation Agent and Reference Banks:The Issuer shall procure that there shall at all
times be five Reference Banks (or such other number as may be required) with
offices in the Relevant Financial Centre and one or more Calculation Agents if
provision is made for them in the relevant Pricing Supplement and for so long
as any Instrument is outstanding. If any Reference Bank (acting through its
relevant office) is unable or unwilling to continue to act as a Reference Bank,
then the Issuer shall (with the prior approval of the Trustee) appoint another
Reference Bank with an office in the Relevant Financial Centre to act as such
in its place. Where more than one Calculation Agent is appointed in respect of
the Instruments, references in these Conditions to the Calculation Agent shall
be construed as each Calculation Agent performing its respective duties under
these Conditions. If the Calculation Agent is unable or unwilling to act as
such or if the Calculation Agent fails duly to establish the Rate of Interest
for an Interest Period or Interest Accrual Period or to calculate any Interest
Amount, Instalment Amount, Final Redemption Amount, Early Redemption Amount or
Optional Redemption Amount, as the case may be, or to comply with any other
requirement, the Issuer shall (with the prior approval of the Trustee) appoint
a leading bank or investment banking firm engaged in the interbank market (or,
if appropriate, money, swap or over-the-counter index options market) which is
most closely connected with the calculation or determination to be made by the
Calculation Agent (acting through its principal London office or any other
office actively involved in such market) to act as such in its place. The
Calculation Agent may not resign its duties without a successor having been
appointed as specified in this paragraph.  4.Redemption, Purchase and Options  4.1Final Redemption:Unless previously redeemed, purchased and cancelled as provided below,
this Instrument will be redeemed at its Final Redemption Amount (which, unless
otherwise provided, is its nominal amount) on the Maturity Date specified in
the relevant Pricing Supplement provided, however, that if this Instrument is a
Perpetual Instrument it will only be redeemable and repayable in accordance
with the following provisions of this Condition 4.  4.2Redemption for Taxation Reasons:If, on the occasion of the next payment in respect
of the Instruments the Issuer satisfies the Trustee immediately before the
giving of the notice referred to below that it would


be unable to make such
payment without having to pay additional amounts as described in Condition 6,
and such requirement to pay such additional amounts arises by reason of a
change in the laws of the United Kingdom or any political sub-division of the
United Kingdom or taxing authority in the United Kingdom or any political
sub-division of the United Kingdom or in the interpretation or application of
the laws of the United Kingdom or any political sub-division of the United
Kingdom or in any applicable double taxation treaty or convention, which change
becomes effective on or after the date on which agreement is reached to issue
the first Tranche of the Instruments, and such requirement cannot be avoided by
the Issuer taking reasonable measures (such measures not involving any material
additional payments by, or expense for, the Issuer), the Issuer may, at its
option, on any Interest Payment Date or, if so specified in the relevant
Pricing Supplement, at any time, having given not less than 30 nor more than 45
days notice to the Instrumentholders in accordance with Condition 13, redeem
all, but not some only, of the Instruments at their Early Redemption Amount
together with interest accrued to the date of redemption provided that the date
fixed for redemption shall not be earlier than 90 days prior to the earliest
date on which the Issuer would be obliged to pay such additional amounts or
make such withholding or deduction, as the case may be, were a payment in
respect of the Instruments then due. Prior to the publication of any notice of
redemption pursuant to this Condition 4.2, the Issuer shall deliver to the
Trustee a certificate signed by two Directors of the Issuer stating that the
requirement referred to above cannot be avoided by the Issuer taking reasonable
measures available to it and the Trustee shall be entitled to accept such
certificate as sufficient evidence of the satisfaction of the condition
precedent set out above in which event it shall be conclusive and binding on
Instrumentholders and Couponholders.  4.3Purchases: The
Issuer and any of its subsidiary undertakings may at any time purchase
Instruments (provided that all unmatured Receipts and Coupons and unexchanged
Talons appertaining to them are attached or surrendered with them) in the open
market or otherwise at any price.  4.4Early Redemption:  4.4.1Zero Coupon Instruments  (a)The Early Redemption Amount payable in respect of any Zero Coupon
Instrument, the Early Redemption Amount of which is not linked to an index
and/or a formula, upon redemption of such Instrument pursuant to Condition 4.2
or upon it becoming due and payable as provided in Condition 8 shall be the
Amortised Face Amount (calculated as provided below) of such Instrument unless
otherwise specified in the relevant Pricing Supplement.  (b)Subject to the provisions of sub-paragraph (c) below, the Amortised
Face Amount of any such Instrument shall be the scheduled Final Redemption
Amount of such Instrument on the Maturity Date discounted at a rate per annum
(expressed as a percentage) equal to the Amortisation Yield (which, if none is
specified in the relevant Pricing Supplement, shall be such rate as would
produce an Amortised Face Amount equal to the issue price of the Instruments if
they were discounted back to their issue price on the Issue Date) compounded
annually.  (c)If the Early Redemption Amount payable in respect of any such Instrument
upon its redemption pursuant to Condition 4.2 or, if applicable, Condition 4.5
or 4.6 or upon it becoming due and payable as provided in Condition 8, is not
paid when due, the Early Redemption Amount due and payable in respect of such
Instrument shall be the Amortised Face Amount of such Instrument as defined in
sub-paragraph (b) above, except that such sub-paragraph shall have effect
as though the reference in that sub-paragraph to the date on which the
Instrument becomes due and payable was replaced by a reference to the Relevant
Date as defined in Condition 6. The calculation of the Amortised Face Amount in
accordance with this sub-paragraph shall continue to be made (as well after as
before judgment) until the Relevant Date, unless the Relevant Date falls on or
after the Maturity Date, in which case the amount due and payable shall be the
scheduled Final Redemption Amount of such Instrument on the Maturity Date
together with any interest that may accrue in accordance with Condition 3.2.  Where such calculation
is to be made for a period of less than one year, it shall be made on the basis
of the Day Count Fraction specified in the relevant Pricing Supplement.  4.4.2Other Instruments:The Early Redemption Amount payable in respect of any Instrument (other
than Instruments described in 4.4.1 above), upon redemption of such Instrument
pursuant to this Condition 4.4 or upon it becoming due and payable as provided
in Condition 8, shall be the Final Redemption Amount unless otherwise specified
in the relevant Pricing Supplement.


4.5Redemption at the Option of the Issuer and Exercise of Issuers
Options:If Call
Option is specified in the relevant Pricing Supplement, the Issuer may, on
giving not less than 15 nor more than 30 days irrevocable notice to the
Instrumentholders (or such other notice period as may be specified in the
relevant Pricing Supplement), redeem, or exercise any Issuers option in
relation to, all or, if so provided, some of such Instruments on any Optional
Redemption Date or Option Exercise Date, as the case may be. Any such
redemption of Instruments shall be at their Optional Redemption Amount together
with interest accrued to the date fixed for redemption. Any such redemption or
exercise must relate to Instruments of a nominal amount at least equal to the
minimum nominal amount (if any) permitted to be redeemed specified hereon and
no greater than the maximum nominal amount (if any) permitted to be redeemed
specified on this Instrument.  All Instruments in
respect of which any such notice is given shall be redeemed, or the Issuers
option shall be exercised, on the date specified in such notice in accordance
with this Condition.  In the case of a
partial redemption or a partial exercise of an Issuers option, the notice to
Instrumentholders shall also contain the serial numbers of the Instruments to
be redeemed, which shall have been drawn in such place as the Trustee may
approve and in such manner as it deems appropriate, subject to compliance with
any applicable laws, listing authority and stock exchange requirements.  4.6Redemption at the Option of Instrumentholders following a Restructuring
Event:  *[4.6.1 Redemption of Instruments issued by NGT at the option of
Instrumentholders  If at any time whilst
any of the Instruments issued by NGT remains outstanding, there occurs the NGT
Restructuring Event, a Public Announcement shall be made and if, within the NGT
Restructuring Period, either:  (a)(if at the time that the NGT Restructuring Event
occurs there are Rated Securities) a Rating Downgrade in respect of the NGT
Restructuring Event occurs; or  (b)(if at the time that the NGT Restructuring Event
occurs there are no Rated Securities) a Negative Rating Event in respect of the
NGT Restructuring Event occurs,  (the NGT Restructuring
Event and Rating Downgrade or the NGT Restructuring Event and Negative Rating
Event, as the case may be, occurring within the NGT Restructuring Period,
together called a Put Event),  then the holder of
each Instrument issued by NGT will have the option upon the giving of a Put
Notice (as defined in Condition 4.6.4) to require NGT to redeem or, at the
option of NGT, purchase (or procure the purchase of) such Instrument on the Put
Date (as defined in Condition 4.6.4) at its principal amount together with
accrued interest to the Put Date.  Promptly upon NGT
becoming aware that a Put Event has occurred, NGT shall, or at any time upon
the Trustee becoming similarly so aware the Trustee may, and if so requested in
writing by the holders of at least one-quarter in principal amount of the
Instruments then outstanding or if so directed by an Extraordinary Resolution
of the Instrumentholders, the Trustee shall, give notice (a Put Event Notice)
to the Instrumentholders in accordance with Condition 13 specifying the nature
of the Put Event and the procedure (as set out in Condition 4.6.4 below) for
exercising the option contained in this Condition 4.6.1.  NGT shall, forthwith
upon becoming aware of the occurrence of the NGT Restructuring Event (a) provide
the Trustee with the relevant Directors Report and (b) provide or procure
that the Reporting Accountants provide the Trustee with the Accountants
Report. The Directors Report and the Accountants Report shall, in the absence
of manifest error, be conclusive and binding on all concerned, including the
Trustee and the Instrumentholders. The Trustee shall be entitled to act, or not
act, and rely on without being expected to verify the accuracy of the same (and
shall have no liability to Instrumentholders for doing so) any Directors
Report and/or any Accountants Report (whether or not addressed to it).  
 *Only
applicable where NGT is the Issuer


4.6.2Forthe purposes of this Condition:  Accountants Report
means a report of the Reporting Accountants stating whether the amounts
included in the calculation of the Operating Profit and the amount for
Consolidated Operating Profit as included in the Directors Report have been
accurately extracted from the accounting records of NGT and its Subsidiaries
and whether the Disposal Percentage included in the Directors Report has been
correctly calculated which will be prepared pursuant to an engagement letter to
be entered into by the Reporting Accountants, NGT and the Trustee.  NGT shall use
reasonable endeavours to procure that there shall at the relevant time be
Reporting Accountants who have (a) entered into an engagement letter with
NGT and the Trustee which shall (i) not limit the liability of the
Reporting Accountants to the Trustee by reference to a monetary cap and (ii) be
available for inspection by Instrumentholders at the principal office of the
Trustee or (b) agreed to provide Accountants Reports on such other terms
as NGT and the Trustee shall approve. If NGT, having used reasonable endeavours,
is unable to procure that there shall at the relevant time be Reporting
Accountants who have entered into an engagement letter complying with (i) above,
the Trustee may rely on an Accountants Report which contains a limit on the
liability of the Reporting Accountants by reference to a monetary cap or
otherwise.  Investors
should be aware that the engagement letter may contain a limit on the liability
of the Reporting Accountants which may impact on the interests of
Instrumentholders.  NGT shall give notice
to the Trustee of the identity of the Reporting Accountants;  Consolidated
Operating Profit means the consolidated operating profit on ordinary
activities before tax and interest and before taking account of depreciation
and amortisation of goodwill and regulatory assets (for the avoidance of doubt,
exceptional items, as reflected in the Relevant Accounts and defined in
Financial Reporting Standard 3 Reporting Financial Performance (FRS 3)
or any successor or any equivalent accounting standard used in preparing the
Relevant Accounts (exceptional items) shall not be included) of NGT and its
subsidiaries (including any share of operating profit of associates and joint
ventures) determined in accordance with United Kingdom generally accepted accounting
principles (UK GAAP) by reference to the Relevant Accounts;  Directors Report
means a report prepared and signed by two directors of NGT addressed to the
Trustee setting out the Operating Profit, the Consolidated Operating Profit and
the Disposal Percentage and stating any assumptions which the Directors of NGT
have employed in determining the Operating Profit;  Disposal Percentage
means, in relation to a sale, transfer, lease or other disposal or
dispossession of any Disposed Assets, the ratio of (a) the aggregate
Operating Profit to (b) the Consolidated Operating Profit, expressed as a
percentage;  Disposed Assets
means, where NGT and/or any of its Subsidiaries sells, transfers, leases or
otherwise disposes of or is dispossessed by any means (but excluding sales,
transfers, leases, disposals or dispossessions which, when taken together with
any related lease back or similar arrangements entered into in the ordinary
course of business, have the result that Operating Profit directly attributable
to any such undertaking, property or assets continues to accrue to NGT or, as
the case may be, such Subsidiary), otherwise than to a wholly-owned Subsidiary
of NGT or to NGT, of the whole or any part (whether by a single transaction or
by a number of transactions whether related or not) of its undertaking or
(except in the ordinary course of business of NGT or any such Subsidiary)
property or assets, the undertaking, property or assets sold, transferred,
leased or otherwise disposed of or of which it is so dispossessed;  Negative Rating Event
shall be deemed to have occurred if either (a) NGT does not, either prior
to or not later than 21 days after the relevant NGT Restructuring Event, seek,
and thereupon use all reasonable endeavours to obtain, a rating of the
Instruments or any other unsecured and unsubordinated debt of NGT having an
initial maturity of five years or more (Rateable Debt) from a Rating Agency
or (b) if NGT does so seek and use such endeavours, it is unable, as a
result of such NGT Restructuring Event, to obtain such a rating of at least
investment grade (BBB- or Baa3 or their respective equivalents for the time
being), provided that a Negative Rating Event shall not be deemed to have
occurred in respect of a particular NGT Restructuring Event if the Rating
Agency declining to assign a rating of at least investment grade (as described
above) does not announce or publicly confirm that its declining to assign a
rating of at least investment grade was the result, in whole or in


part, of any event or
circumstance comprised in or arising as a result of, or in respect of, the
applicable NGT Restructuring Event (whether or not the NGT Restructuring Event
shall have occurred at the time such investment grade rating is declined);  NGT Restructuring
Event shall be deemed to have occurred at any time (whether or not approved by
the Board of Directors of NGT) that the sum of Disposal Percentages for NGT
within any period of 36 months commencing on or after the issue date of the
first Tranche of the Instruments is greater than 50 per cent.;  NGT Restructuring
Period means the period ending 90 days after a Public Announcement (or such
longer period in which the Rated Securities or Rateable Debt, as the case may
be, is or are under consideration (announced publicly within the first
mentioned period) for rating review or, as the case may be, rating by a Rating
Agency);  Operating Profit, in
relation to any Disposed Assets means the operating profits on ordinary
activities before tax and interest and before taking account of depreciation
and amortisation of goodwill and regulatory assets (for the avoidance of doubt,
exceptional items, as reflected in the Relevant Accounts shall not be included)
of NGT and its Subsidiaries directly attributable to such Disposed Assets as
determined in accordance with UK GAAP by reference to the Relevant Accounts
and, if Relevant Accounts do not yet exist, determined in a manner consistent
with the assumptions upon which the Directors Report is to be based. Where the
Directors of NGT have employed assumptions in determining the Operating Profit,
those assumptions should be clearly stated in the Directors Report;  Public Announcement
means an announcement by NGT or the Trustee, of the occurrence of the NGT
Restructuring Event published in a leading national newspaper having general
circulation in the United Kingdom (which is expected to be the Financial Times);  Rated Securities
means the Instruments, if and for so long as they shall have an effective
rating from a Rating Agency and otherwise any Rateable Debt which is rated by a
Rating Agency; provided that if there shall be
no such Rateable Debt outstanding prior to the maturity of the Instruments, the
holders of not less than one-quarter in principal amount of outstanding
Instruments may require NGT to obtain and thereafter update on an annual basis
a rating of the Instruments from a Rating Agency. In addition, NGT may at any
time obtain and thereafter update on an annual basis a rating of the
Instruments from a Rating Agency, provided that,
except as provided above, NGT shall not have any obligation to obtain such a
rating of the Instruments;  Rating Agency means
Standard & Poors Ratings Services, a division of The McGraw-Hill
Companies, Inc. and its successors or Moodys Investors Service, Inc.
and its successors or any rating agency substituted for either of them (or any
permitted substitute of them) by NGT from time to time with the prior written
approval of the Trustee;  Rating Downgrade
shall be deemed to have occurred in respect of the NGT Restructuring Event if
the then current rating whether provided by a Rating Agency at the invitation
of NGT or by its own volition assigned to the Rated Securities by any Rating
Agency is withdrawn or reduced from an investment grade rating (BBB- or Baa3 or
their respective equivalents for the time being or better) to a non-investment
grade rating (BB+ or Ba1 or their respective equivalents for the time being or
worse) or, if a Rating Agency shall already have rated the Rated Securities
below investment grade (as described above), the rating is lowered one full
rating category; provided that a Rating Downgrade otherwise arising by virtue
of a particular reduction in rating shall not be deemed to have occurred in
respect of a particular NGT Restructuring Event if the Rating Agency making the
reduction in rating to which this definition would otherwise apply does not
announce or publicly confirm that the reduction was the result, in whole or
part, of any event or circumstance comprised in or arising as a result of, or
in respect of, the applicable NGT Restructuring Event (whether or not the
applicable NGT Restructuring Event shall have occurred at the time of the
Rating Downgrade);  Relevant Accounts
means the most recent annual audited consolidated financial accounts of NGT and
its Subsidiaries preceding the relevant sale, transfer, lease or other disposal
or dispossession of any Disposed Asset;  Reporting Accountants
means the auditors of NGT (but not acting in their capacity as auditors) or
such other firm of accountants as may be nominated by NGT and approved in
writing by the Trustee for the purpose or, failing which, as may be selected by
the Trustee for the purpose; and


Subsidiary means a
subsidiary within the meaning of Section 736 of the Companies Act 1985 and
Subsidiaries shall be construed accordingly.  4.6.3The
Trustee shall not be responsible for ascertaining or monitoring whether or not
the NGT Restructuring Event, a Negative Rating Event or a Rating Downgrade in
relation to NGT has occurred and, unless and until it has actual knowledge to
the contrary, shall be entitled to assume that no such event has occurred.  4.6.4To
exercise the option of redemption of an Instrument under Condition 4.6.1 the
Instrumentholder must deliver each Instrument to be redeemed accompanied by a
duly signed and completed notice of exercise in the form (for the time being
current) obtainable from the specified office of any Paying Agent (a Put
Notice) and, in which the Instrumentholder may specify an account to which
payment is to be made under this Condition 4.6 to the specified office of any
Paying Agent on any business day falling within the period (the Put Period)
of 45 days after a Put Event Notice is given. The Instrument should be
delivered together with all Receipts and Coupons (and Talons) appertaining
thereto maturing after the date (the Put Date) falling seven days after the
expiry of the Put Period, failing which (unless Condition 5.5.2 applies) the
Paying Agent will require payment of an amount equal to the face value of any
such missing Receipt, Coupon and/or Talon. Any amount so paid will be
reimbursed in the manner provided in Condition 5 against presentation and
surrender of the relevant missing Receipt, Coupon and/or Talon, subject to
Condition 7. The Paying Agent to which such Instrument and Put Notice are
delivered will issue to the Instrumentholder concerned a non-transferable
receipt in respect of the Instrument so delivered. Payment in respect of any
Instrument so delivered will be made, if the Instrumentholder duly specified a
bank account in the Put Notice to which payment is to be made, on the Put Date
by transfer to that bank account and, in every other case, on or after the Put
Date in the manner provided in Condition 5 against presentation and surrender
(or, in the case of part payment, endorsement) of such receipt at the specified
office of any Paying Agent. A Put Notice, once given, shall be irrevocable. For
the purposes of the Conditions and the Trust Deed, receipts issued pursuant to
this Condition 4.6 shall be treated as if they were Instruments. NGT shall
redeem the relevant Instruments on the Put Date unless previously redeemed or
purchased.]  *[4.6.1 Redemption of Instruments issued by NGC at
the option of Instrumentholders  If NGC Restructuring
Put Option is specified in the relevant Pricing Supplement and at any time
whilst any of the Instruments issued by NGC remains outstanding there occurs an
NGC Restructuring Event and in relation to that NGC Restructuring Event, a
Negative Certification is made and, within the NGC Restructuring Period either:  (a)(if at the time that an NGC Restructuring Event
occurs there are Rated Securities) a Rating Downgrade in respect of the
relevant NGC Restructuring Event occurs; or  (b)(if at the time that an NGC Restructuring Event
occurs there are no Rated Securities) a Negative Rating Event in respect of the
relevant NGC Restructuring Event occurs,  (the NGC Restructuring
Event and Rating Downgrade or the NGC Restructuring Event and Negative Rating
Event, as the case may be, occurring within the NGC Restructuring Period,
together with a Negative Certification, shall be called a Put Event),  then the holder of
each Instrument of NGC will have the option upon the giving of a Put Notice (as
defined in Condition 4.6.4) to require NGC to redeem or, at the option of NGC,
purchase (or procure the purchase of) such Instrument on the Put Date (as
defined in Condition 4.6.4) at its principal amount together with accrued
interest to the Put Date.  Promptly upon NGC
becoming aware that a Put Event has occurred, and in any event no later than 14
days after the occurrence of a Put Event, NGC shall, or at any time upon the
Trustee becoming similarly so aware the Trustee may, and if so requested in
writing by the holders of at least one-quarter in principal amount of the
Instruments then outstanding or if so directed by an Extraordinary Resolution
of the Instrumentholders, the Trustee shall, give notice (a Put Event Notice)
to the Instrumentholders in accordance with Condition 13 specifying the nature
of the Put Event and the procedure (as set out in Condition 4.6.4 below) for
exercising the option contained in this Condition 4.6.1.  
 *Only
applicable where NGC is the Issuer


4.6.2Forthe purposes of this Condition:  Electricity Act
means the Electricity Act 1989 as amended or re-enacted from time to time and
all subordinate legislation made pursuant thereto;  Electricity
Transmission Licence means the transmission licence, as subsequently amended
from time to time, originally granted by the Secretary of State for Energy to
NGC under the Electricity Act;  Negative
Certification means, on the occurrence of an NGC Restructuring Event, such
event or events being certified in writing by an independent financial adviser
appointed by NGC and approved by the Trustee (or, if NGC shall not have
appointed such an adviser within 21 days after becoming aware of the occurrence
of such NGC Restructuring Event, appointed by the Trustee (following
consultation with NGC)) as being in its opinion materially prejudicial to the
interests of the Instrumentholders. Any Negative Certification by an
independent financial adviser as to whether or not, in its opinion, any event
defined as an NGC Restructuring Event is materially prejudicial to the
interests of the Instrumentholders shall, in the absence of manifest error, be
conclusive and binding upon NGC, the Trustee, the Instrumentholders and the
Couponholders;  Negative Rating Event
shall be deemed to have occurred if NGC is unable as a result of an NGC
Restructuring Event to obtain a rating of the Instruments or of any other
comparable unsecured and unsubordinated debt of NGC (or of any Subsidiary of
NGC and which is guaranteed on an unsecured and unsubordinated basis by NGC)
having an initial maturity of five years or more (Rateable Debt) from a
Rating Agency of at least investment grade (BBB-/Baa3, or their respective
equivalents for the time being), which rating NGC shall use all reasonable
endeavours to obtain, provided that a Negative Rating Event shall not be deemed
to have occurred in respect of a particular NGC Restructuring Event if the
Rating Agency making the relevant reduction or declining to assign a rating of
at least investment grade (as described above) does not announce or publicly
confirm or otherwise inform the Trustee that the reduction or its declining to
assign a rating of at least investment grade was the result, in whole or in
part, of any event or circumstance comprised in or arising as a result of, or
in respect of, the applicable NGC Restructuring Event;  NGC Restructuring
Event means the occurrence of any one or more of the following events:  (a)the Secretary of State for Trade and Industry or any official succeeding
to his functions gives NGC written notice of revocation of the Electricity
Transmission Licence in accordance with the terms as to revocation set out in Schedule 2
of the Electricity Transmission Licence, such revocation to become effective
not later than the Maturity Date of the Instruments or NGC agrees in writing
with the Secretary of State for Trade and Industry or any official succeeding
to his functions to any revocation or surrender of the Electricity Transmission
Licence or any legislation (whether primary or subordinate) is enacted
terminating or revoking the Electricity Transmission Licence; or  (b)any modification is made to the terms and conditions of the Electricity
Transmission Licence other than such a modification which the Trustee, in its
opinion, considers to be not materially prejudicial to the interests of the
Instrumentholders and has so confirmed in writing to NGC; or  (c)any legislation (whether primary or subordinate) is enacted removing,
reducing or qualifying the duties or powers of the Secretary of State for Trade
and Industry or any official succeeding to his functions and/or the Gas and
Electricity Markets Authority under Section 3A of the Electricity Act as
compared with those in effect on the issue date of the first Tranche of the
Instruments other than such legislation which the Trustee, in its opinion,
considers to be not materially prejudicial to the interests of the
Instrumentholders and has so confirmed in writing to NGC;  NGC Restructuring
Period means:  (a)if at the time at which the NGC Restructuring Event occurs there are Rated
Securities, the period of 90 days starting from and including the day on which
an NGC Restructuring Event occurs or such longer period in which the Rated
Securities are under consideration (announced publicly within such 90 day
period) for rating review by a Rating Agency; or  (b)if at the time at which an NGC Restructuring Event occurs there are no
Rated Securities, the period starting from and including the day on which an
NGC Restructuring Event occurs and


ending
on the day 90 days following the date on which a Negative Certification shall
have been given to NGC in respect of that NGC Restructuring Event;  Rated Securities
means (a) the Instruments or (b) such other comparable unsecured and
unsubordinated debt of NGC (or of any Subsidiary of NGC and which is guaranteed
on an unsecured and unsubordinated basis by NGC) having an initial maturity of
five years or more selected by NGC from time to time for the purpose of this definition
with the approval of the Trustee and which possesses an investment grade rating
(BBB-/Baa3, or their respective equivalents for the time being, or better) by
any Rating Agency (whether at the invitation of NGC or by its own volition);  Rating Agency means
Standard & Poors Ratings Services, a division of The McGraw-Hill
Companies, Inc., or any of its Subsidiaries and their successors or Moodys
Investors Service, Inc., or any of its Subsidiaries and their successors
or any rating agency substituted for either of them (or any permitted
substitute of them) by NGC from time to time with the prior written approval of
the Trustee;  Rating Downgrade
shall be deemed to have occurred in respect of an NGC Restructuring Event if
the rating assigned to the Rated Securities by any Rating Agency which is
current immediately prior to the occurrence of an NGC Restructuring Event
(whether provided by a Rating Agency at the invitation of NGC or by its own
volition) is withdrawn or reduced from an investment grade rating (BBB-/Baa3,
or their respective equivalents for the time being, or better) to a
non-investment grade rating (BB+/Ba1, or their respective equivalents for the
time being, or worse) or, if the Rating Agency shall have already rated the
Rated Securities below investment grade (as described above), the rating is
lowered one full rating category (from BB+/Ba1 to BB/Ba2 or such similar
lowering) provided that a Rating Downgrade shall not be deemed to have occurred
in respect of or as a result of a particular NGC Restructuring Event if the
Rating Agency making the relevant reduction in rating or declining to assign a
rating of at least investment grade as provided in these Conditions does not
announce or publicly confirm, or otherwise inform the Trustee, that the
reduction or declining was the result, in whole or part, of any event or
circumstance comprised in or arising as a result of, or in respect of, the
applicable NGC Restructuring Event;  Subsidiary means a
subsidiary within the meaning of Section 736 of the Companies Act 1985 and
Subsidiaries shall be construed accordingly.  4.6.3The
Trustee shall not be responsible for ascertaining whether or not an NGC
Restructuring Event, a Negative Rating Event or a Rating Downgrade in relation
to NGC has occurred and, unless and until it has actual knowledge to the
contrary, shall be entitled to assume that no such event has occurred.  4.6.4To
exercise the option of redemption of an Instrument under Condition 4.6.1 the
Instrumentholder must deliver each Instrument to be redeemed accompanied by a
duly signed and completed notice of exercise in the form (for the time being
current) obtainable from the specified office of any Paying Agent (a Put
Notice) and, in which the Instrumentholder may specify an account to which
payment is to be made under this Condition 4.6 to the specified office of any
Paying Agent on any business day falling within the period (the Put Period)
of 45 days after a Put Event Notice is given. The Instrument should be
delivered together with all Receipts and Coupons (and Talons) appertaining
thereto maturing after the date (the Put Date) falling seven days after the
expiry of the Put Period, failing which (unless Condition 5.5.2 applies) the
Paying Agent will require payment of an amount equal to the face value of any
such missing Receipt, Coupon and/or Talon. Any amount so paid will be
reimbursed in the manner provided in Condition 5 against presentation and
surrender of the relevant missing Receipt, Coupon and/or Talon, subject to Condition
7. The Paying Agent to which such Instrument and Put Notice are delivered will
issue to the Instrumentholder concerned a non-transferable receipt in respect
of the Instrument so delivered.  Payment in respect of
any Instrument so delivered will be made, if the Instrumentholder duly
specified a bank account in the Put Notice to which payment is to be made, on
the Put Date by transfer to that bank account and, in every other case, on or
after the Put Date in the manner provided in Condition 5 against presentation
and surrender (or, in the case of part payment, endorsement) of such receipt at
the specified office of any Paying Agent. A Put Notice, once given, shall be
irrevocable. For the purposes of the Conditions and the Trust Deed, receipts
issued pursuant to this Condition 4.6 shall be treated as if they were
Instruments. NGC shall redeem the relevant Instruments on the Put Date unless
previously redeemed or purchased.]


4.7Redemption at the Option of Instrumentholders:If Put Option is specified in the
relevant Pricing Supplement, the Issuer shall, at the option of any
Instrumentholder, upon such Instrumentholder giving not less than 15 nor more
than 30 days notice to the Issuer (or such other notice period as may be
specified on this Instrument) redeem such Instrument on the Optional Redemption
Date(s) (as specified in the Pricing Supplement) at its Optional Redemption
Amount (as specified in the Pricing Supplement) together with interest accrued
to the date fixed for redemption.  To exercise such option
(which must be exercised on an Option Exercise Date) the holder must deposit
such Instrument with any Paying Agent at its specified office, together with a
duly completed option exercise notice (Exercise Notice) in the form
obtainable from any Paying Agent within the Instrumentholders Option Period
(as specified in the Pricing Supplement). No Instrument so deposited and option
exercised may be withdrawn (except as provided in the Agency Agreement) without
the prior consent of the Issuer.  4.8Partly Paid Instruments: Partly Paid Instruments will be redeemed, whether at maturity, early
redemption or otherwise, in accordance with the provisions of this Condition
and the provisions specified in the relevant Pricing Supplement.  4.9Redemption by Instalments:Unless previously redeemed, purchased
and cancelled as provided in this Condition 4, each Instrument which provides
for Instalment Dates and Instalment Amounts will be partially redeemed on each
Instalment Date at the Instalment Amount specified in the relevant Pricing
Supplement. The outstanding nominal amount of each such Instrument shall be
reduced by the Instalment Amount (or, if such Instalment Amount is calculated
by reference to a proportion of the nominal amount of such Instrument, such proportion)
for all purposes with effect from the related Instalment Date, unless payment
of the Instalment Amount is improperly withheld or refused on presentation of
the related Receipt, in which case, such amount shall remain outstanding until
the Relevant Date relating to such Instalment Amount.  4.10Cancellation:All
Instruments redeemed pursuant to any of the foregoing provisions will be
cancelled forthwith together with all unmatured Receipts and Coupons and
unexchanged Talons attached thereto. All Instruments purchased by or on behalf
of the Issuer or any of its Subsidiaries may, at the option of the Issuer be
held by or may be surrendered together with all unmatured Receipts and Coupons
and all unexchanged Talons attached to them to a Paying Agent for cancellation,
but may not be resold and when held by the Issuer or any of its respective
Subsidiaries shall not entitle the holder to vote at any meeting of
Instrumentholders and shall not be deemed to be outstanding for the purposes of
calculating quorums at meetings of Instrumentholders or for the purposes of
Condition 10.  5.Payments and Talons  5.1Payments:
Payments of principal and interest in respect of Instruments will, subject as
mentioned below, be made against presentation and surrender of the relevant
Receipts (in the case of payments of Instalment Amounts other than on the due
date for redemption and provided that the Receipt is presented for payment
together with its relative Instrument), Instruments (in the case of all other
payments of principal and, in the case of interest, as specified in Condition
5.5.6) or Coupons (in the case of interest, save as specified in
Condition 5.5.6), as the case may be, at the specified office of any
Paying Agent outside the United States by a cheque payable in the currency in
which such payment is due drawn on, or, at the option of the holder, by
transfer to an account denominated in that currency with, a bank in the
principal financial centre for that currency; provided that in the case of
Euro, the transfer shall be in a city in which banks have access to the TARGET
System.  5.2Payments in the United States:Notwithstanding the above, if any Instruments are
denominated in U.S. dollars, payments in respect of them may be made at the
specified office of any Paying Agent in New York City in the same manner as
specified above if (a) the Issuer shall have appointed Paying Agents with
specified offices outside the United States with the reasonable expectation
that such Paying Agents would be able to make payment of the amounts on the
Instruments in the manner provided above when due, (b) payment in full of
such amounts at all such offices is illegal or effectively precluded by
exchange controls or other similar restrictions on payment or receipt of such
amounts and (c) such payment is then permitted by United States law,
without involving, in the opinion of the Issuer, any adverse tax consequence to
the Issuer.  5.3Payments subject to Fiscal Laws etc.:All payments are subject in all cases
to any applicable fiscal or other laws, regulations and directives, but without
prejudice to the provisions of Condition 6. No


commission or expenses shall be charged to the Instrumentholders or Couponholders in
respect of such payments.  5.4Appointment of Agents:The Issuing and Paying Agent, the Paying Agents and the Calculation Agent
initially appointed by the Issuer and their respective specified offices are
listed below. The Issuing and Paying Agent, the Paying Agents and the
Calculation Agent act solely as agents of the Issuer and do not assume any
obligation or relationship of agency or trust for or with any holder. The
Issuer reserves the right at any time with the approval of the Trustee to vary
or terminate the appointment of the Issuing and Paying Agent, any other Paying
Agent or the Calculation Agent and to appoint additional or other Paying
Agents, provided that the Issuer shall at all times maintain (a) an
Issuing and Paying Agent, (b) a Paying Agent having a specified office in
a continental European city, (c) a Calculation Agent where the Conditions
so require one, (d) so long as the Instruments are listed on the London
Stock Exchange, a Paying Agent having a specified office in London and (e) to
the extent that the Issuer is able to do so and not provided for by the
foregoing provisions of this Condition 5.4, a Paying Agent with a
specified office in a European Union member state that will not be obliged to
withhold or deduct tax pursuant to European Council Directive 2003/48/EC or
any other European Union Directive implementing the conclusions of the ECOFIN
Council meeting of 26-27 November 2000 on the taxation of savings
income or any law implementing or complying with, or introduced in order to
conform to, such Directive. As used in these Conditions, the terms Issuing and
Paying Agent, Calculation Agent, and Paying Agent include any additional
or replacement Issuing and Paying Agent, Calculation Agent or Paying Agent
appointed under this Condition.  In addition, the
Issuer shall forthwith appoint a Paying Agent in New York City in respect of
any Instruments denominated in U.S. dollars in the circumstances described in
paragraph 5.2 above.  Notice of any such
change or any change of any specified office shall promptly be given to the
Instrumentholders in accordance with Condition 13.  5.5Unmatured Coupons and Receipts and unexchanged Talons:  5.5.1Unless
the Instrument provides that the relevant Coupons are to become void upon the
due date for redemption of those Instruments, Instruments should be surrendered
for payment together with all unmatured Coupons (if any) appertaining to them,
failing which an amount equal to the face value of each missing unmatured
Coupon (or, in the case of payment not being made in full, that proportion of
the amount of such missing unmatured Coupon that the sum of principal so paid
bears to the total principal due) will be deducted from the Final Redemption
Amount, Early Redemption Amount or Optional Redemption Amount, as the case may
be, due for payment. Any amount so deducted shall be paid in the manner
mentioned above against surrender of such missing Coupon within a period of 10
years from the Relevant Date for the payment of such principal (whether or not
such Coupon has become void pursuant to Condition 7).  5.5.2If
the relevant Instrument so provides, upon the due date for redemption of any
Instrument, unmatured Coupons relating to such Instrument (whether or not
attached) shall become void and no payment shall be made in respect of them.  5.5.3If
the relevant Instrument so provides, upon the due date for redemption of any
Instrument, any unexchanged Talon relating to such Instrument (whether or not
attached) shall become void and no Coupon shall be delivered in respect of such
Talon.  5.5.4Upon
the due date for redemption of any Instrument which is redeemable in
instalments, all Receipts relating to such Instrument having an Instalment Date
falling on or after such due date (whether or not attached) shall become void
and no payment shall be made in respect of them.  5.5.5Where
any Instrument which provides that the relevant Coupons are to become void upon
the due date for redemption of those Instruments is presented for redemption
without all unmatured Coupons and any unexchanged Talon relating to it, and
where any Instrument is presented for redemption without any unexchanged Talon
relating to it, redemption shall be made only against the provision of such
indemnity as the Issuer may require.  5.5.6If
the due date for redemption of any Instrument is not a due date for payment of
interest, interest accrued from the preceding due date for payment of interest
or the Interest Commencement Date, as the case may be, shall only be payable
against presentation (and surrender if appropriate) of the relevant Instrument.
Interest accrued on an Instrument that only bears interest after its Maturity
Date shall be payable on redemption of that Instrument against presentation of
that Instrument.


5.6Non-business Days:If any date for payment in respect of any
Instrument, Receipt or Coupon is not a business day, the holder shall not be
entitled to payment until the next following business day nor to any interest
or other sum in respect of such postponed payment. In this paragraph, business
day means a day (other than a Saturday or a Sunday) on which banks and foreign
exchange markets are open for business in the relevant place of presentation,
in such jurisdictions as shall be specified as Financial Centres in the
relevant Pricing Supplement and:  5.6.1(in
the case of a payment in a currency other than Euro) where payment is to be
made by transfer to an account maintained with a bank in the relevant currency,
on which foreign exchange transactions may be carried on in the relevant
currency in the principal financial centre of the country of such currency; or  5.6.2(in the case of a payment in Euro), which is a TARGET
Business Day.  5.7Talons:On or
after the Interest Payment Date for the final Coupon forming part of a Coupon
sheet issued in respect of any Instrument, the Talon forming part of such
Coupon sheet may be surrendered at the specified office of the Issuing and
Paying Agent in exchange for a further Coupon sheet (but excluding any Coupons
which may have become void pursuant to Condition 7).  6.       Taxation  All payments of principal and interest by or on behalf of
the Issuer in respect of the Instruments, the Receipts and the Coupons will be
made without withholding or deduction for or on account of, any present or
future taxes or duties of whatever nature imposed or levied by or on behalf of
the United Kingdom or any political sub-division of the United Kingdom or any
authority in or of the United Kingdom having power to tax, unless such
withholding or deduction is compelled by law. In that event, the Issuer will
pay such additional amounts of principal and interest as will result in the
payment to the Instrumentholders, Receiptholders or, as the case may be, the
Couponholders of the amounts which would otherwise have been receivable in
respect of the Instruments, Receipts or Coupons had no withholding or deduction
been made, except that no such additional amounts shall be payable in respect
of any Instrument, Receipt or Coupon presented for payment:  (a)by or on behalf of, a person who is liable to such taxes or duties in
respect of such Instrument, Receipt or Coupon by reason of his having some
connection with the United Kingdom other than the mere holding of such
Instrument, Receipt or Coupon; or  (b)in the United Kingdom;  (c)by or on behalf of a person who would not be liable or subject to such
deduction or withholding by making a declaration of non-residence or other
claim for exemption to a tax authority;  (d)more than 30 days after the Relevant Date except to the extent that the
holder would have been entitled to such additional amounts on presenting the
same for payment on such thirtieth day; or  (e)where such withholding or deduction is imposed on a payment to an
individual and is required to be made pursuant to European Council Directive
2003/48/EC or any other Directive implementing the conclusions of the ECOFIN
Council meeting of 26-27 November 2000 on the taxation of
savings income or any law implementing or complying with, or introduced in
order to conform to, such Directive; or  (f)by or on behalf of a holder who would have been able to avoid such
withholding or deduction (i) by presenting the relevant Instrument,
Receipt or Coupon to another Paying Agent in a Member State of the European
Union; or (ii) by satisfying any statutory or procedural requirements
(including, without limitation, the provision of information).  As used in these
Conditions, Relevant Date in respect of any Instrument, Receipt or Coupon
means the date on which payment in respect of it first becomes due or (if any
amount of the money payable is improperly withheld or refused) the date on
which payment in full of the amount outstanding is made or (if earlier) the
date on which notice is duly given to the Instrumentholders in accordance with
Condition 13 that, upon further presentation of the Instrument, Receipt or
Coupon being made in accordance with the Conditions, such payment will be made,
provided that payment is in fact made upon such presentation. References in
these Conditions to (a) principal shall be deemed to include any premium
payable in respect of the Instruments, all Instalment Amounts, Final Redemption
Amounts, Early Redemption Amounts, Optional Redemption Amounts, Amortised Face
Amounts and all other amounts in the nature of principal payable pursuant to
Condition 4 or any amendment or supplement to it, (b) interest shall be
deemed to include all Interest Amounts and all other amounts payable pursuant
to Condition 3 or any


amendment or
supplement to it and (c) principal and/or interest shall be deemed to
include any additional amounts which may be payable under this Condition or any
undertaking given in addition to or in substitution for it under the Trust
Deed.  7.Prescription  Instruments, Receipts and Coupons (which, for this
purpose, shall not include Talons) shall be prescribed and become void unless
presented for payment within 10 years (in the case of principal) or five years
(in the case of interest) from the appropriate Relevant Date in respect of
them.  8.Events of Default  If any of the following events (Events of Default)
occurs and is continuing, the Trustee at its discretion may, and if so
requested by the holders of at least one quarter in nominal amount of the
Instruments then outstanding or if so directed by an Extraordinary Resolution
shall, give notice to the Issuer at its registered office that the Instruments
are, and they shall accordingly immediately become due and repayable at their
Redemption Amount together with accrued interest (if any) to the date of
payment:  (a)Non-Payment:there
is default for more than 30 days in the payment of any principal or interest
due in respect of the Instruments; or  (b)Breach of Other Obligations: there is default in the performance or observance
by the Issuer of any other obligation or provision under the Trust Deed or the
Instruments (other than any obligation for the payment of any principal or
interest in respect of the Instruments) which default is incapable of remedy
or, if in the opinion of the Trustee capable of remedy, is not remedied within
90 days after notice of such default shall have been given to the Issuer by the
Trustee; or  (c)Cross-Acceleration:if (i) any other present or future Relevant Indebtedness of the
Issuer [(or a Principal Subsidiary)]* becomes due and payable prior to its
stated maturity by reason of any actual event of default, or (ii) any
amount in respect of such Relevant Indebtedness is not paid when due or, as the
case may be, within any applicable grace period, provided that the aggregate
amount of the Relevant Indebtedness in respect of which one or more of the
events mentioned above in this paragraph (c) have occurred equals or
exceeds £50,000,000, for the period up to 31 March 2017, and thereafter,
£100,000,000.  [For the purposes of
this Condition, Principal Subsidiary means Transco plc, NGC and National Grid
USA, and includes any successor entity thereto or any member of the group of
companies comprising NGT and each of its subsidiary undertakings (the NGT
Group) which the Auditors have certified to the Trustee as being a company to
which all or substantially all of the assets of a Principal Subsidiary are
transferred. In the event that all or substantially all of the assets of a
Principal Subsidiary are transferred to a member of the NGT Group as described
above, the transferor of such assets shall cease to be deemed to be a Principal
Subsidiary for the purposes of this Condition.]*; or  (d)Winding-up:a
resolution is passed, or a final order of a court in the United Kingdom is made
and, where possible, not discharged or stayed within a period of 90 days, that
the Issuer be wound up or dissolved; or  (e)Enforcement Proceedings: attachment is made of the whole or substantially the whole of the assets
or undertakings of the Issuer and such attachment is not released or cancelled
within 90 days or an encumbrancer takes possession or an administrative or
other receiver or similar officer is appointed of the whole or substantially
the whole of the assets or undertaking of the Issuer or an administration or
similar order is made in relation to the Issuer and such taking of possession,
appointment or order is not released, discharged or cancelled within 90 days;
or  (f)Insolvency:the Issuer ceases to carry on all or substantially
all of its business or is unable to pay its debts within the meaning of Section 123(1)(e) or
Section 123(2) of the Insolvency Act 1986; or  (g)Bankruptcy:the
Issuer is adjudged bankrupt or insolvent by a court of competent jurisdiction
in its country of incorporation,  provided that in the case of paragraph (b) the
Trustee shall have certified that in its opinion such event is materially
prejudicial to the interests of the Instrumentholders.  
 *Only
applicable where NGC is the Issuer


9.Enforcement  The Trustee may, at its discretion and without further
notice, institute such proceedings against the Issuer as it may think fit to
enforce any obligation, condition or provision binding on the Issuer under the
Instruments or under the Trust Deed, but shall not be bound to do so unless:  (a)it has been so directed by an Extraordinary Resolution or in writing by
the holders of at least one-quarter of the principal amount of the Instruments
outstanding; and  (b)it has been indemnified to its satisfaction.  No Instrumentholder, Receiptholder or Couponholder shall
be entitled to institute proceedings directly against the Issuer unless the
Trustee, having become bound to proceed as specified above, fails to do so
within a reasonable time and such failure is continuing.  10.Meetings of Instrumentholders, Modifications
and Substitution  10.1Meetings of Instrumentholders:The Trust Deed contains provisions for convening
meetings of Instrumentholders to consider any matter affecting their interests,
including the sanctioning by Extraordinary Resolution (as defined in the Trust
Deed) of a modification of any of these Conditions or any provisions of the
Trust Deed. An Extraordinary Resolution duly passed at any such meeting shall
be binding on Instrumentholders (whether or not they were present at the
meeting at which such resolution was passed) and on all Couponholders, except
that any Extraordinary Resolution proposed, inter alia, (a) to
amend the dates of maturity or redemption of the Instruments, any Instalment
Date or any date for payment of interest on the Instruments, (b) to reduce
or cancel the nominal amount of, or any Instalment Amount of, or any premium
payable on redemption of, the Instruments, (c) to reduce the rate or rates
of interest in respect of the Instruments or to vary the method or basis of calculating
the rate or rates or amount of interest or the basis for calculating any
Interest Amount in respect of the Instruments, (d) if a Minimum and/or a
Maximum Rate of Interest is shown on the face of the Instrument, to reduce any
such Minimum and/or Maximum Rate of Interest, (e) to vary any method of
calculating the Final Redemption Amount, the Early Redemption Amount or the
Optional Redemption Amount, (f) to take any steps that as specified in
this Instrument may only be taken following approval by an Extraordinary
Resolution to which the special quorum provisions apply, and (g) to modify
the provisions concerning the quorum required at any meeting of
Instrumentholders or the majority required to pass the Extraordinary Resolution
will only be binding if passed at a meeting of the Instrumentholders (or at any
adjournment of that meeting) at which a special quorum (as defined in the Trust
Deed) is present. A resolution in writing signed by the
holders of not less than 95 per cent.  in
nominal amount of the Instruments will be binding on all Instrumentholders and
Couponholders. The Issuer may convene a meeting of Instrumentholders jointly
with the holders of all other instruments issued pursuant to the Agency
Agreement and not forming a single series with the Instruments to which meeting
the provisions referred to above apply as if all such instruments formed part
of the same series, provided that the proposals to be considered at such
meeting affect the rights of the holders of the instruments of each series attending
the meeting in identical respects (save insofar as the Conditions applicable to
each such series are not identical).  10.2Modification of the Trust Deed:The Trustee may agree, without the consent of the
Instrumentholders or Couponholders, to (a) any modification of any of the
provisions of the Trust Deed that is of a formal, minor or technical nature or
is made to correct a manifest error, and (b) any other modification
(except as mentioned in the Trust Deed), and any waiver or authorisation of any
breach or proposed breach, of any of the provisions of the Trust Deed that is
in the opinion of the Trustee not materially prejudicial to the interests of
the Instrumentholders. Any such modification, authorisation or waiver shall be
binding on the Instrumentholders and the Couponholders and, if the Trustee so
requires, such modification shall be notified to the Instrumentholders as soon
as practicable.  10.3Substitution:The
Trust Deed contains provisions permitting the Trustee to agree, subject to such
amendment of the Trust Deed and such other conditions as the Trustee may
require, but without the consent of the Instrumentholders or the Couponholders,
to the substitution of any other company in place of the Issuer or of any
previous substituted company, as principal debtor under the Trust Deed and the
Instruments. In the case of such a substitution the Trustee may agree, without
the consent of the Instrumentholders or the Couponholders, to a change of the
law governing the Instruments, the Receipts, the Coupons, the Talons and/or the
Trust Deed provided that such change would not in the opinion of the Trustee be
materially prejudicial to the interests of the Instrumentholders.


10.4Entitlement of the Trustee:In connection with the exercise of its functions
(including but not limited to those referred to in this Condition) the Trustee
shall have regard to the interests of the Instrumentholders as a class and
shall not have regard to the consequences of such exercise for individual
Instrumentholders or Couponholders and the Trustee shall not be entitled to
require, nor shall any Instrumentholder or Couponholder be entitled to claim,
from the Issuer any indemnification or payment in respect of any tax
consequence of any such exercise upon individual Instrumentholders or
Couponholders.  11.Replacement of Instruments, Receipts,
Coupons and Talons  If an Instrument, Receipt, Coupon or Talon is lost,
stolen, mutilated, defaced or destroyed, it may be replaced, subject to
applicable laws, listing authority and stock exchange regulations, at the
specified office of such other Paying Agent as may from time to time be
designated by the Issuer for the purpose and notice of whose designation is
given to Instrumentholders in accordance with Condition 13 on payment by
the claimant of the fees and costs incurred in connection with that replacement
and on such terms as to evidence, security and indemnity (which may provide, inter alia, that if the allegedly lost, stolen or destroyed
Instrument, Receipt, Coupon or Talon is subsequently presented for payment or,
as the case may be, for exchange for further Coupons, there shall be paid to
the Issuer on demand the amount payable by the Issuer in respect of such
Instruments, Receipts, Coupons or further Coupons) and otherwise as the Issuer
may require. Mutilated or defaced Instruments, Receipts, Coupons or Talons must
be surrendered before replacements will be issued.  12.Further Issues  The Issuer may from time to time without the consent of
the Instrumentholders or Couponholders create and issue further instruments
having the same terms and conditions as the Instruments and so that such
further issue shall be consolidated and form a single series with such
Instruments. References in these Conditions to the Instruments include (unless
the context requires otherwise) any other instruments issued pursuant to this
Condition and forming a single series with the Instruments. Any such further
instruments forming a single series with Instruments constituted by the Trust
Deed or any deed supplemental to it shall, and any other instruments may (with
the consent of the Trustee), be constituted by the Trust Deed.  The Trust Deed contains provisions for convening a single
meeting of the Instrumentholders and the holders of instruments of other series
if the Trustee so decides.  13.Notices  All notices to the Instrumentholders will be valid if
published in a daily English language newspaper of general circulation in the
United Kingdom (which is expected to be the Financial Times).
If in the opinion of the Trustee any such publication is not practicable,
notice shall be validly given if published in another leading daily English
language newspaper with general circulation in Europe. Any such notice shall be
deemed to have been given on the date of such publication or, if published more
than once or on different dates, on the first date on which publication is
made, as provided above.  Couponholders shall be deemed for all purposes to have
notice of the contents of any notice given to the holders of Instruments in
accordance with this Condition.  14.Indemnification of Trustee  The Trust Deed contains provisions for the
indemnification of the Trustee and for its relief from responsibility,
including but not limited to provisions relieving it from any obligation to (a) appoint
an independent financial adviser and (b) take proceedings to enforce
repayment unless indemnified to its satisfaction. The Trustee is entitled to
enter into business transactions with the Issuer or any of its subsidiary undertakings,
parent undertakings, joint ventures or associated undertakings without
accounting for any profit resulting from these transactions and to act as
trustee for the holders of any other securities issued by the Issuer or any of
its subsidiary undertakings, parent undertakings, joint ventures or associated
undertakings.  15.Contracts (Rights of Third Parties) Act
1999  No person shall have any right to enforce any term or
condition of the Instruments under the Contracts (Rights of Third Parties) Act
1999.  16.Governing Law and Jurisdiction  16.1The Instruments and all matters arising from or connected with the
Instruments are governed by, and shall be construed in accordance with, English
law.


16.2The courts of England have exclusive jurisdiction to settle any dispute (a
Dispute), arising from or connected with the Instruments.  16.3The Issuer agrees that the courts of England are the most appropriate and
convenient courts to settle any Dispute and, accordingly, that it will not
argue to the contrary.  16.4Nothing in this Condition 16 prevents the Trustee or any Instrumentholder
from taking proceedings relating to a Dispute (Proceedings) in any other
courts with jurisdiction. To the extent allowed by law, the Trustee or
Instrumentholders may take concurrent Proceedings in any number of
jurisdictions.


SUMMARY OF PROVISIONS RELATING TO THE INSTRUMENTS
WHILE IN GLOBAL FORM  Initial Issue of Instruments  Upon the initial
deposit of a Global Instrument with a common depositary for Euroclear and
Clearstream, Luxembourg (the Common Depositary), Euroclear or Clearstream,
Luxembourg will credit each subscriber with a nominal amount of Instruments
equal to the nominal amount of those Instruments for which it has subscribed
and paid.  Instruments which are
initially deposited with the Common Depositary may also be credited to the
accounts of subscribers with (if indicated in the relevant Pricing Supplement)
other clearing systems through direct or indirect accounts with Euroclear and
Clearstream, Luxembourg held by such other clearing systems. Conversely, Instruments
that are initially deposited with another clearing system may similarly be
credited to the accounts of subscribers with Euroclear, Clearstream, Luxembourg
or other clearing systems.  Relationship of Accountholders with Clearing Systems  Each of the persons
shown in the records of Euroclear, Clearstream, Luxembourg or any other
clearing system as the holder of an Instrument represented by a Global
Instrument must look solely to Euroclear, Clearstream, Luxembourg or such
clearing system (as the case may be) for his share of each payment made by an
Issuer or the Issuers to the bearer of such Global Instrument and in relation
to all other rights arising under the Global Instruments, subject to and in
accordance with the respective rules and procedures of Euroclear, Clearstream,
Luxembourg or such clearing systems (as the case may be). Such persons shall
have no claim directly against either of the Issuers in respect of payments due
on the Instruments for so long as the Instruments are represented by such Global
Instrument and such obligations of such Issuer or Issuers will be discharged by
payment to the bearer of such Global Instrument in respect of each amount so
paid.  The Trustee may call
for any certificate or other document to be issued by Euroclear, Clearstream,
Luxembourg or any other clearing system as to the principal amount of
Instruments represented by a Global Instrument standing to the account of any
person. Any such certificate or other document shall, in the absence of
manifest error, be conclusive and binding for all purposes. Any such
certificate or other document may comprise any form of statement or print out
of electronic records provided by the relevant clearing system (including
Euroclears EUCLID or Clearstream, Luxembourgs Cedcom system) in accordance
with its usual procedures and in which the holder of a particular principal
amount of any other clearing system is clearly identified together with the
amount of such holding. The Trustee shall not be liable to any person by reason
of having accepted as valid or not having rejected any certificate or other
document to such effect purporting to be issued by Euroclear, Clearstream,
Luxembourg or any other clearing system and subsequently found to be forged or
not authentic.  Exchange  1.Temporary Global Instruments  Each temporary Global
Instrument will be exchangeable, free of charge to the holder, on or after its
Exchange Date:  1.1if the relevant Pricing Supplement
indicates that such Global Instrument is issued in compliance with the C Rules
or in a transaction to which TEFRA is not applicable (as to which, see Summary
of the Programme  Selling Restrictions), in whole, but not in part, for the
Definitive Instruments defined and described below; and  1.2otherwise, in whole or in part upon
certification as to non-U.S. beneficial ownership in the form set out in the
Agency Agreement for interests in a permanent Global Instrument or, if so
provided in the relevant Pricing Supplement, for Definitive Instruments.  2.Permanent Global Instruments  Each permanent Global
Instrument will be exchangeable, free of charge to the holder, on or after its
Exchange Date in whole but not, except as provided under Partial Exchange of
Permanent Global Instruments, in part for Definitive Instruments:  2.1by the relevant Issuer giving notice to the
Issuing and Paying Agent and the Instrumentholders of its intention to effect
such exchange;


2.2if the relevant Pricing Supplement
provides that such Global Instrument is exchangeable at the request of the
holder, by the holder giving notice to the Issuing and Paying Agent of its
election for such exchange; and  2.3otherwise, if the permanent Global
Instrument is held on behalf of Euroclear or Clearstream, Luxembourg or any
other clearing system (an Alternative Clearing System) and any such clearing
system is closed for business for a continuous period of 14 days (other than by
reason of holidays, statutory or otherwise) or announces an intention
permanently to cease business or in fact does so.  3.Partial Exchange of Permanent Global
Instruments  For so long as a
permanent Global Instrument is held on behalf of a clearing system and the
rules of that clearing system permit, such permanent Global Instrument will be
exchangeable in part on one or more occasions for Definitive Instruments (a) if
principal in respect of any Instruments is not paid when due or (b) if so
provided in, and in accordance with, the Conditions (which will be set out in
the relevant Pricing Supplement) relating to Partly Paid Instruments.  4.Delivery of Instruments  On or after any due
date for exchange the holder of a Global Instrument may surrender such Global
Instrument or, in the case of a partial exchange, present it for endorsement to
or to the order of the Issuing and Paying Agent. In exchange for any Global
Instrument, or the part of that Global Instrument to be exchanged, the relevant
Issuer will (a) in the case of a temporary Global Instrument exchangeable for a
permanent Global Instrument, deliver, or procure the delivery of, a permanent
Global Instrument in an aggregate nominal amount equal to that of the whole or
that part of a temporary Global Instrument that is being exchanged or, in the
case of a subsequent exchange, endorse, or procure the endorsement of, a
permanent Global Instrument to reflect such exchange or (b) in the case of a
Global Instrument exchangeable for Definitive Instruments, deliver, or procure
the delivery of, an equal aggregate nominal amount of duly executed and
authenticated Definitive Instruments. In this Information Memorandum, Definitive
Instruments means, in relation to any Global Instrument, the Definitive
Instruments for which such Global Instrument may be exchanged (if appropriate,
having attached to them all Coupons and Receipts in respect of interest or
Instalment Amounts that have not already been paid on the Global Instrument and
a Talon). Definitive Instruments will be security printed in accordance with
any applicable legal and stock exchange requirements in or substantially in the
form set out in the Schedules to the Trust Deed. On exchange in full of each
permanent Global Instrument, the relevant Issuer will, if the holder so
requests, procure that it is cancelled and returned to the holder together with
the relevant Definitive Instruments.  5.Exchange Date  Exchange Date means,
in relation to a temporary Global Instrument, the day falling after the expiry
of 40 days after its issue date and, in relation to a permanent Global
Instrument, a day falling not less than 60 days, or in the case of failure to
pay principal in respect of any Instruments when due 30 days, after that
on which the notice requiring exchange is given and on which banks are open for
business in the city in which the specified office of the Issuing and Paying Agent
is located and in the city in which the relevant clearing system is located.  Amendment to Conditions  The temporary Global
Instruments and permanent Global Instruments contain provisions that apply to
the Instruments which they represent, some of which modify the effect of the
terms and conditions of the Instruments set out in this Information Memorandum.
The following is a summary of certain of those provisions:  6.Payments  No payment falling due
after the Exchange Date will be made on any Global Instrument unless exchange
for an interest in a permanent Global Instrument or for Definitive Instruments
is improperly withheld or refused. Payments on any temporary Global Instrument
issued in compliance with the D Rules before the Exchange Date will only
be made against presentation of certification as to non-U.S. beneficial
ownership in the form set out in the Agency Agreement. All payments in respect
of Instruments represented by a Global Instrument will be made against
presentation for endorsement and, if no further payment falls to be made in
respect of the Instruments, surrender of that Global Instrument to or to the
order of the Issuing and Paying Agent or such other Paying Agent as shall have
been notified to the Instrumentholders for such purpose. A record of each
payment so made will be endorsed on each Global Instrument, which endorsement
will be prima facie evidence that such payment
has been made in respect of the Instruments.


7.Prescription  Claims against an
Issuer in respect of Instruments which are represented by a permanent Global
Instrument will become void unless it is presented for payment within a period
of 10 years (in the case of principal) and five years (in the case of interest)
from the appropriate Relevant Date (as defined in Condition 6).  8.Meetings  The holder of a
permanent Global Instrument shall (unless such permanent Global Instrument
represents only one Instrument) be treated as being two persons for the
purposes of any quorum requirements of a meeting of Instrumentholders and, at
any such meeting, as having one vote in respect of each minimum Specified
Denomination of Instruments for which such Global Instrument may be exchanged.  9.Cancellation  Cancellation of any
Instrument represented by a permanent Global Instrument which is required by
the Conditions to be cancelled (other than upon its redemption) will be
effected by reduction in the nominal amount of the relevant permanent Global
Instrument.  10.Purchase  Instruments
represented by a permanent Global Instrument may only be purchased by an Issuer
or any of its subsidiary undertakings if they are purchased together with the
right to receive all future payments of interest and Instalment Amounts (if
any) on those Instruments.  11.Issuers Option  Any option of an Issuer
provided for in the Conditions of any Instruments while such Instruments are
represented by a permanent Global Instrument shall be exercised by such Issuer
giving notice to the Instrumentholders within the time limits set out in and
containing the information required by the Conditions, except that the notice
shall not be required to contain the serial numbers of Instruments drawn in the
case of a partial exercise of an option and accordingly no drawing of
Instruments shall be required. In the event that any option of such Issuer is
exercised in respect of some but not all of the Instruments of any Series, the
rights of accountholders with a clearing system or Approved Intermediary in
respect of the Instruments will be governed by the standard procedures of
Euroclear, Clearstream, Luxembourg or any other clearing system (as the case
may be).  12.Instrumentholders Options  Any option of the
Instrumentholders provided for in the Conditions of any Instruments while such
Instruments are represented by a permanent Global Instrument may be exercised
by the holder of the permanent Global Instrument giving notice to the Issuing
and Paying Agent within the time limits relating to the deposit of Instruments
with a Paying Agent set out in the Conditions substantially in the form of the
notice available from any Paying Agent stating the nominal amount of
Instruments in respect of which the option is exercised and at the same time
presenting the permanent Global Instrument for notation.  13.Trustees Powers  In considering the
interests of Instrumentholders while any Global Instrument is held on behalf of
a clearing system, the Trustee may have regard to any information provided to
it by such clearing system or its operator as to the identity (either
individually or by category) of its accountholders with entitlements to such
Global Instrument and may consider such interests as if such accountholders
were the holders of the Instruments represented by such Global Instrument.  14.Events of Default  Each Global Instrument
provides that the Trustee, at its discretion, may, and if so requested by
holders of at least one-quarter in nominal amount of the Instruments then
outstanding or if so directed by an Extraordinary Resolution, shall cause such
Global Instrument to become due and repayable in the circumstances described in
Condition 8 by stating in the notice to the relevant Issuer the principal
amount of such Global Instrument which is becoming due and repayable. If
principal in respect of any Instrument is not paid when due, only the Trustee
may enforce the rights of the Instrumentholders against such Issuer under the
terms of the Trust Deed unless the Trustee, having become bound to proceed,
fails to do so within a reasonable time and such failure is continuing.


15.Notices  So long as any
Instruments are represented by a Global Instrument and such Global Instrument
is held on behalf of a clearing system, notices to the holders of Instruments
of that Series may be given by delivery of the relevant notice to that clearing
system for communication by it to entitled accountholders in substitution for
publication as required by the Conditions or by delivery of the relevant notice
to the holder of the Global Instrument.  16.Partly Paid Instruments  The provisions
relating to Partly Paid Instruments are not set out in this Information
Memorandum, but will be contained in the relevant Pricing Supplement and so in
the Global Instruments. While any instalments of the subscription moneys due
from the holder of Partly Paid Instruments are overdue, no interest in a Global
Instrument representing such Instruments may be exchanged for an interest in a
permanent Global Instrument or for Definitive Instruments (as the case may be).
If any Instrumentholder fails to pay any instalment due on any Partly Paid
Instruments within the time specified, the relevant Issuer may forfeit such
Instruments and shall have no further obligation to their holder in respect of
them.


USE OF PROCEEDS  The net proceeds of
the issue of each Series of Instruments will be used by the relevant Issuer for
its general corporate purposes.


DESCRIPTION OF NATIONAL GRID TRANSCO PLC  Overview  National Grid Transco
plc (NGT) is the name of the holding company of the group of companies (the NGT
Group) which was the product of a recommended merger between National Grid
Group plc (NGG) and Lattice Group plc (Lattice). This merger was
implemented by way of a court sanctioned scheme of arrangement under the U.K.
Companies Act 1985 between Lattice and its shareholders and was completed on 21
October 2002. Following the closing of the merger, NGG was renamed
National Grid Transco plc.  Business of National Grid Transco  NGT is an
international network utility company with electricity and gas transmission and
distribution interests in the U.K. and the U.S. It has also transferred its
network skills to related markets in the U.K. and U.S., including wireless
infrastructure, metering and liquefied natural gas, and has interests in
electricity interconnectors in the U.K., U.S. and Australia.  NGT own, operate and
develop the high-voltage electricity transmission system in England and Wales
through its wholly-owned subsidiary, National Grid Company plc (NGC). NGCs
electricity assets consist of approximately 4,500 miles of overhead lines,
about 410 miles of underground cables and some 341 substations at around 243
separate sites. NGT also owns and operates the gas National Transmission System
in Britain through its wholly-owned subsidiary, Transco plc (Transco), which
comprises approximately 4,200 miles of high pressure pipelines and
24 compressor stations, connecting to eight regional distribution networks
and third party independent systems for onward transportation of gas to end
consumers. Its gas distribution system currently comprises almost all of
Britains gas distribution system, although it has agreed to sell four of its
distribution networks as discussed below in Recent Developments. The existing
gas distribution system consists of approximately 170,000 miles of distribution
pipelines and is the largest gas distribution system in Europe. Gas is
transported on behalf of approximately 70 active gas shippers from the National
Transmission System through the eight regional distribution networks to around
21 million consumers. As well as gas distribution, Transco is responsible for
the safety, development and maintenance of the transportation system and
operates the national gas emergency service.  In the U.S., NGT
operate as National Grid USA (Grid USA) through its various subsidiaries
described below. Grid USA owns and operates an electricity transmission network
of approximately 14,000 miles. Its U.S. transmission business operates, at 69kV
and above, approximately 9,000 miles of overhead lines, underground cables, a
139-mile direct current transmission line and 526 substations. It is the
largest electricity transmission service provider in the northeastern U.S. by
reference to the length of these high-voltage transmission lines. Grid USA
provides electricity transmission in upstate New York through Niagara Mohawk
Power Corporation and in New England principally through New England Power
Company and The Narragansett Electric Company. It is one of the leading
electricity distribution service providers in the northeastern U.S., as
measured by energy delivered, and one of the largest utilities in the U.S., as
measured by the number of electricity distribution customers. Its electricity
distribution operations in the U.S. serves approximately 3.3 million customers
over a network of 62,000 miles. Its U.S. gas distribution business serves
around 560,000 customers over a network of 8,000 miles in upstate New York.
Grid USA provides electricity and gas distribution in upstate New York through
its subsidiary Niagara Mohawk Power Corporation. It provides electricity
distribution in New England through its subsidiaries Massachusetts Electric
Company, Nantucket Electric Company, The Narragansett Electric Company and
Granite State Electric Company.  Through its subsidiary
GridAmerica L.L.C. (GridAmerica), NGT manage, in the Midwest of the U.S., a
range of electricity transmission operations on behalf of three participant
utilities. These include operational planning, outage management and scheduling
of transmission service. It is the first multi-system independent transmission
company and was formed under agreements with Ameren, First Energy, Northern
Indiana Public Service Company and the Midwest Independent System Operator. The
agreements have provisions that allow the participant utilities to sell their
transmission assets to GridAmerica for cash and stock. GridAmerica provides
services in a geographic area that includes over 14,000 miles of transmission
lines across five states.  NGT has focused its
other businesses on the provision of infrastructure and related services where
it believes it can exploit its core skills and assets to create value,
particularly, wireless infrastructure, metering and liquefied natural gas, and
interconnectors. Its wireless infrastructure operations provides solutions to
fibre and wireless network operators in the U.K. and the U.S., building,
leasing and operating sites for the base stations and radio masts needed by
mobile operators. In addition, following the closing of the acquisition of
Crown Castle U.K., as discussed below in Recent Developments, the business
also provides infrastructure and other services for the


transmission of
television and radio in the U.K. Both aspects exploit NGT Groups project
management skills and infrastructure. Other businesses include installation,
maintenance and meter reading to gas shippers and gas storage facilities. NGT
also operate electricity interconnectors between England and Scotland and
England and France, which provide access to alternative wholesale electricity
markets and additional sources of supply and it is constructing an undersea
electricity interconnector across the Bass Straight between the Australian
states of Tasmania and Victoria.  Recent Developments  On 31 August 2004,
NGT announced that it had entered into agreements for the sale of four of our
U.K. regional gas distribution networks. These networks are the North of
England, Wales & the West of England, the South of England and Scotland,
for which the total cash consideration is £5.8 billion. Under the
agreements, the purchasers will also assume certain environmental and other
liabilities of approximately £130 million. NGT will retain the
distribution networks for the West Midlands, London, East of England and North
West England. Distributing gas to approximately 11 million business and
home consumers, it will continue to have the largest gas distribution business
in the U.K.  Upon closing of the
transactions described above, NGT intend to deliver a non-recurring return of
value to shareholders of £2.0 billion (with associated share consolidation),
intend to recommend a 20 per cent. increase in the ordinary dividends for
the current year to 23.7 pence per ordinary share, as well as maintain its
target of increasing ordinary dividends per share from the recommended
increased amount of dividends by 7 per cent. per year until 31 March 2008
and intend to retire or repay approximately £2.3 billion of Transcos
indebtedness with a projected ratio of debt to regulatory asset value of 50 per
cent. for Transco.  The closing of the
sale of the gas distribution networks described above is subject to certain
regulatory consents and approvals including consents and approvals from the
U.K. Gas and Electricity Markets Authority, the U.K. Department for Trade and
Industry and the U.K. Health and Safety Executive. Ofgem has issued a detailed
timetable, which outlines the consents and approvals process. NGT is aiming to
close these transactions in the second quarter of 2005. Completion of the
transactions is also subject to termination rights, exercisable by each of NGT
and the purchasers, in the event of defined circumstances arising which would
have a material adverse impact on the distribution networks being sold. In
certain of these circumstances break-up fees may be payable by either NGT or
the purchasers.  On 28 June 2004,
NGT announced an agreement on the terms of an acquisition of the U.K.
operations of Crown Castle International, Inc. (Crown Castle UK) for a cash
consideration of approximately £1.1 billion, which reflects closing
adjustments. NGT closed the acquisition of Crown Castle UK on 31 August 2004.
Following the closing of this acquisition, it commenced the merger of Crown
Castle UK with Gridcom (UK) Limited, its wholly-owned subsidiary. The combined
business is the major independent provider of infrastructure to the mobile
telecommunications operators in the U.K., with a substantial portfolio of
almost 5,000 active sites. Crown Castle UK is also one of the two providers of
infrastructure for transmission of terrestrial analogue and digital television
and radio in the U.K.


Board of Directors  The Directors of
National Grid Transco plc and their functions and principal directorships
outside the NGT Group, are as follows:  Name
  
  Title
  
  Principal
  activities outside
  National Grid TranscoSir John Parker
  
  Chairman (Non-Executive)
  
  Non-Executive Deputy Chairman of Carnival
  Plc and Non-Executive chairman of RMC group plc.Roger Urwin
  
  Group Chief Executive
  
  Non-Executive Director of Utilico Investment
  Trust PLC.Steve Lucas
  
  Group Finance Director
  
  Non-Executive Director of Compass Group
  plc.Edward Astle
  
  Group Director
  
  No appointments held outside the NGT
  Group.Steven Holliday
  
  Group Director
  
  Non-Executive Director of Marks and
  Spencer Group plc.Mike Jesanis
  
  Group Director
  
  No appointments held outside the NGT
  Group.Nick Winser
  
  Group Director
  
  Director of Energy Networks Association
  Ltd.John Grant
  
  Non-Executive Director
  
  Executive Chairman of Hasgo Group Limited
  and Peter Stubs Limited. Non-Executive chairman of Cordex Plc and
  Non-Executive Director of Torotrak plc, Corac Group Plc and The Royal
  Automobile Club Ltd.Kenneth Harvey
  
  Non-Executive Director
  
  Non-Executive Chairman of Pennon Group
  plc, The Intercare Group plc and Beaufort Group plc.Paul Joskow
  
  Non-Executive Director
  
  Trustee of the Putnam Mutual Funds and a
  director of the Whitehead Institute of Biomedical Research and an Independent
  Director of TransCanada.Stephen Pettit
  
  Non-Executive Director
  
  Non-Executive Director of National Air
  Traffic Services, KBC Advanced Technologies plc, Norwood Systems Ltd and
  Halma plc.Maria Richter
  
  Non-Executive Director
  
  Director of the Western Electricity
  Co-ordinating Council.George Rose
  
  Non-Executive Director
  
  Director of BAe Systems plc,
  Non-Executive Director of SAAB AB and a member of the Financial Reporting
  Review Panel  The business address
of each of the above is 1-3 Strand, London WC2N 5EH.


CONSOLIDATED CAPITALISATION AND INDEBTEDNESS OF THE NGT
GROUP  The following is a
summary of the unaudited historical cost capital and reserves and indebtedness
as at 31 March 2004 of National Grid Transco plc and its subsidiaries (the
NGT Group):  As at
  31 March
  2004(unaudited)£ millionCapital
  and reservesCalled up
  share capital
  
  309Share
  premium account
  
  1,280Other
  reserves
  
  (4,983
  )Profit and
  loss account
  
  4,615Equity
  shareholders funds
  
  1,221Minority
  interests
  
  50Total
  shareholders funds
  
  1,271Indebtedness
  for borrowed moneyAmounts
  falling due within one yearBank loans
  and overdrafts
  
  314Commercial
  paper
  
  557Other bonds
  and notes
  
  832Other loans
  
  31,706Amounts
  falling due after more than one yearBank loans
  
  823Other bonds
  
  10,587Other loans
  
  13211,542Total
  borrowings
  
  13,248Total
  capitalisation and indebtedness
  
  14,519  
 Notes: (1)Account has been taken of liabilities and guarantees
between undertakings within the same group. (2)All short-term and long-term debt of NGT Group is
unguaranteed, except for the following bonds: Issued by
National Grid Company plc and guaranteed by Ambac Assurance UK Limited: £300 million 2.983 per cent.
2018 Guaranteed Retail Price Index-Linked Bonds £50 million 2.817 per cent. 2032
Guaranteed Retail Price Index-Linked Bonds Issued by
Niagara Mohawk Power Corporation and guaranteed by XL Capital Assurance Inc.: $115.7 million variable rate
2029 Pollution Control Revenue Bonds Issued by
Niagara Mohawk Power Corporation and guaranteed by Ambac Indemnity Corporation: $45.6 million variable rate
2013 Pollution Control Refunding Revenue Bonds $100 million variable rate
2015 Pollution Control Revenue Bonds $69.8 million variable rate
2023 Pollution Control Revenue Bonds $75 million variable rate 2025
Pollution Control Revenue Bonds $50 million variable rate 2026
Pollution Control Revenue Bonds $25.76 million variable rate
2027 Pollution Control Revenue Bonds $93.2 million variable rate
2027 Pollution Control Revenue Bonds Issued by
Nantucket Electric Company and guaranteed by Ambac Indemnity Corporation: $1.4 million 6.75 per cent.
2005 Electric Utility Revenue Bonds $1.4 million 6.75 per cent.
2006 Electric Utility Revenue Bonds $1.4 million 5.60 per cent.
2007 Electric Utility Revenue Bonds $1.4 million 5.75 per cent.
2008 Electric Utility Revenue Bonds $1.4 million 5.75 per cent.
2009 Electric Utility Revenue Bonds $10.5 million 5.875 per cent.
2017 Electric Utility Revenue Bonds As at
31 March 2004, debt of the NGT Group totalling £925 million was secured by
charges over property, plant and other assets of the group.


(3)In July 2004, National Grid Transco plc issued
the following unsecured and unguaranteed bonds: EUR 500m Floating Rate
Instruments due 2006 EUR 200m Floating Rate
Instruments due 2005 (4)As at 31 March 2004, NGT Group had
outstanding BG Group related commitments and contingencies amounting to
£13 million, arising from the restructuring of BG Group in 1999. (5)Other contingencies and guarantees of the
NGT Group as at 31 March 2004 amounted to £253 million, including
guarantees of £168 million. Details of these guarantees are shown below: (i)Performance guarantees of £24 million
relating to certain property obligations of a NGT Group undertaking; (ii)£50 million guarantee of the obligations of
a NGT Group undertaking to pay liabilities under a meter operating contract for
a duration expected to be 20-30 years; (iii)A performance guarantee during the
construction of the Victoria to Tasmania interconnector, that expires on
commissioning, of £41m; (iv)A four-year guarantee relating to an
interconnector construction project amounting to £20 million provided by
National Grid Transco plc; (v)Guarantees in respect of a former associate
amounting to £14 million; and (vi)Other guarantees amounting to £19 million
arising in the normal course of business and entered into on normal commercial
terms. NGT has
also guaranteed the lease obligations of a former associate, to a NGT Group
undertaking, amounting to £45 million. (6)As at 31 March 2004, NGT had
guaranteed the repayment of principal sums, any associated premium and interest
on specific loans due from certain NGT Group undertakings to third parties, the
sterling equivalent of which amounted to £1,892 million. The guarantees are for
varying terms between four and ten years. (7)The information contained in this Statement
is extracted without material adjustment from NGTs audited consolidated
financial statements as at 31 March 2004, except for other reserves and
profit and loss account, which have been restated for the effect of the
adoption of Financial Reporting Standard (FRS) 20 Accounting for Share Based
Payments and extracted from the 30 September 2004 interim results
statement. Before restatement, the figures were (£5,131 million) and
£4,755 million respectively. (8)As at 30 September 2004, the Total
Indebtedness of NGT increased by £1,922 million as compared to
£13,248 million at 31 March 2004. This is mainly due to the debt
financed acquisition of the U.K. operations of Crown Castle International, Inc.
Aside from this, there has been no material change in the capitalisation and
indebtedness, contingent liabilities or guarantees of NGT since 31 March 2004. (9)As at 31 March 2004, the NGT Group had
cash and short-term money market investments of £616 million.


DESCRIPTION OF NATIONAL GRID COMPANY PLC  Overview  National Grid Company
plc (National Grid Company), a wholly-owned subsidiary of National Grid
Transco, is the owner and operator of the electricity transmission system (the Transmission
System) in England and Wales and is the sole holder of a transmission licence
(the Transmission Licence) in England and Wales. National Grid Company is
required by the Electricity Act 1989 (the Electricity Act) to develop,
operate and maintain an efficient, co-ordinated and economical system of
electricity transmission and to facilitate competition in the supply and
generation of electricity. Since the introduction of the new electricity trading
arrangements (NETA) on 27 March 2001, under the Electricity Act,
National Grid Company is also obliged to operate an efficient, economic and
co-ordinated transmission system. National Grid Company is also responsible for
reinforcing, renewing and maintaining the Transmission System to meet the
requirements of customers and to ensure continued compliance with the security
standards set out in the Transmission Licence.  Business of National Grid Company  National Grid Company
derives the vast majority of its turnover and profits from charges for services
provided by its transmission business (the Transmission Business) to, inter alia, generators, interconnector users, distributors,
suppliers and directly-connected customers. Its other businesses include the
procurement of balancing services and the operation of the interconnectors with
Scotland and France.  National Grid Company
has three wholly-owned trading subsidiaries, Elexon Limited, NGC Leasing
Limited and NGC Properties Limited (forming, together with NGC, the NGC Group).  Regulation  The electricity
industry in England and Wales is regulated primarily under the Electricity Act
and the Utilities Act which together establish the Gas and Electricity Markets
Authority and a regime for the licensing of electricity generation,
transmission, distribution and supply. The Gas and Electricity Markets
Authority is responsible for the supervision and enforcement of the licensing
regime. Under the Electricity Act, the Gas and Electricity Markets Authoritys
principal objective in carrying out its functions relating to licensing under
that Act is to protect the interests of consumers in relation to electricity
conveyed by distribution systems, wherever appropriate by promoting effective
competition between persons engaged in, or in commercial activities connected
with the generation, transmission, distribution or supply of electricity having
regard to the need to ensure that all reasonable demands for electricity are
met and the need to ensure that licence holders are able to finance activities
which are the subject of obligations imposed by Part 1 of the Electricity
Act or the Utilities Act.  The Transmission
Licence came into effect on vesting and, unless revoked, will continue in force
until determined by not less than 25 years notice by the Secretary of State.
The Transmission Licence may be revoked by the Secretary of State in specified
circumstances, including non-payment of fees, insolvency, change in the control
of National Grid Company, cessation of the Transmission Business and
non-compliance with enforcement orders made by the Gas and Electricity Markets
Authority and non-compliance with orders issued by the Secretary of State under
certain provisions of general competition legislation.  National Grid Company
is prohibited by the Transmission Licence from purchasing or otherwise
acquiring electricity on its own account for the purpose of sale to third
parties. Since the introduction of NETA, the exceptions to the prohibition have
changed to except the procurement or use of balancing services or the purchase
or acquisition where such purchase or acquisition is with the consent of the
Gas and Electricity Markets Authority.  The transmission
business comprises of two separately regulated activities, Transmission Owner
and System Operator.  The Transmission Owner
owns and maintains the physical assets, develops the network to accommodate new
connections/disconnections, manages a programme of asset replacement and
investment to ensure the long term reliability of the systems.  Revenue from charges
for using the transmission network and charges for connections made before March 1990
is controlled by a revenue restriction condition set out in the transmission
licence. This revenue restriction, known as a price control, takes into
account, among other factors, operating expenditure, capital expenditure and
cost of capital, which for the current price control, is at a real pre-tax rate
of 6.25 per cent. In addition, pass-through


is given in respect of
non-domestic rates and the Office of Gas and Electricity Markets (Ofgem)
licence fees attributable to the electricity transmission business.  National Grid Company
is permitted to set charges for connections to the transmission system made
since March 1990 to recover the costs directly or indirectly incurred in
providing connections, together with a reasonable rate of return on such costs.  The current price
control was introduced on 1 April 2001. It was expected to remain in
force until 31 March 2006, but is likely to be extended to 31 March 2007.
Discussions on the detail of the extension to the price control are ongoing and
are expected to conclude during 2005.  An amended charging
methodology for the Transmission Owner, known as Plugs, was introduced from
1 April 2004. The total revenue recoverable by NGC under its licence
remains unchanged. The changes modified the ownership boundary between what was
part of the transmission network, shared by all users, and what were separate
connection assets attributable to specific users. This required NGC to make
repayments to connected parties associated with relevant assets that have been
subject to capital contributions or other accelerated payment terms. In total
these repayments will be in the region of £70 million of which the
majority will be treated as capital expenditure and included in the regulatory
asset base.  The System Operator
undertakes a range of activities necessary for the successful delivery in real
time of secure, reliable and efficient delivery of electricity and the
continuous balancing of supply and demand.  Revenue from charges
for provision of balancing services is regulated under an incentive scheme,
where benefits of cost savings in system operation compared to targets are
shared with customers.  The Gas and
Electricity Markets Authority is seeking to introduce common rules for trading
arrangements and transmission access across Great Britain, commonly known as
the British Electricity Trading and Transmission Arrangements or BETTA. These
rules are expected to replace the separate arrangements currently in existence
for England and Wales on the one hand and Scotland on the other. The Scottish
interconnectors (currently outside of the regulated business) would no longer
be operated under the current commercial agreements but would form part of the
regulated businesses of the current interconnector owners National Grid Company
and Scottish Power. The method for recovery of costs associated with the
establishment of BETTA has been agreed in principle with Ofgem. It is currently
expected that BETTA will be implemented in 2005.


Board of Directors  The Directors of
National Grid Company plc and their functions and principal directorships
outside the NGC Group, are as follows:  Name
  
  Title
  
  Principal
  activities outside
  National Grid CompanyRoger Urwin
  
  Chairman
  
  Group Chief Executive of National Grid
  Transco plc and Director of National Grid (US) Holdings Limited, National
  Grid (US) Investments 4, National Grid (US) Partner 1 Limited, National Grid
  (US) Partner 2 Limited, National Grid Holdings Limited, National Grid
  Holdings One plc, National Grid International Limited, National Grid USA and
  Transco plc and Non-Executive Director of Utilico Investment Trust PLC.Steven Holliday
  
  Chief Executive
  
  Group Executive Director of National Grid
  Transco plc, Director of Lattice Group plc, Transco Holdings plc, Transco
  plc, National Grid International Limited, Transco plc and Electricity
  Association Limited and Non-Executive Director of Marks and Spencer Group
  plc.Neil Moore
  
  Finance Director
  
  Director of NG Procurement Holdings LtdSteve Lucas
  
  Director
  
  Group Finance Director of National Grid
  Transco plc and Director of Lattice Group Holdings Limited, Lattice Group
  plc, National Grid Holdings Limited, National Grid International Limited,
  National Grid (US) Partner 1 Limited, National Grid (US) Partner 2 Limited,
  National Grid (US) Investments 4, National Grid Holdings One plc, National
  Grid Transco plc, NGT Telecom No. 1 Limited, National Grid USA, National Grid
  (US) Holdings Limited, Transco Holdings plc and Transco plc, President of
  National Grid Holdings Inc. and Non-Executive Director of Compass Group plc.Nick Winser
  
  Group Director
  
  Group Executive Director of National Grid
  Transco plc, Director of Gridcom (UK) Limited, GridAmerica Holdings Inc.,
  National Grid USA, Transco plc, Energy Networks Association Limited,
  President of GridAmerica LLC and Energy Networks Association Ltd.  The business address
of each of the above is 1-3 Strand, London WC2N 5EH.


CAPITALISATION AND INDEBTEDNESS OF NGC GROUP  The following is a
summary of the unaudited historical capital and reserves and indebtedness as at
31 March 2004 of National Grid Company plc and its subsidiaries (the NGC
Group):  As at
  31 March
  2004(unaudited)£ millionCapital
  and reservesAuthorised
  1,000,000,000 ordinary shares of £0.20. each
  
  200Authorised
  74,803,600 preference shares of £1 each
  
  75Issued,
  allotted, called up and fully paid 31,870 ordinary shares
  
  0Issued,
  allotted, called up and fully paid 43,406,000 preference shares
  
  43Share
  premium account
  
  454Capital
  redemption reserve
  
  0Special
  reserve
  
  29Other
  reserves
  
  40Profit and
  loss account
  
  320Total
  shareholders funds
  
  886Indebtedness
  for borrowed moneyAmounts
  falling due within one yearBank loans
  and overdrafts
  
  20Other bonds
  
  Commercial
  paper
  
  20Amounts
  falling due after more than one yearBank loans
  
  407Other bonds
  
  2,4022,809Total
  borrowings
  
  2,829Total
  Capitalisation and Indebtedness
  
  3,715  
 Notes: (1)Account has been taken of liabilities and
guarantees between undertakings within the same group. (2)All short-term and long-term debt of the
NGC Group is unguaranteed and unsecured, except for the following which are
guaranteed: £300 million 2.983 per cent. 2018
Guaranteed Retail Price Index-Linked Bonds £50 million 2.817 per cent. 2032 Guaranteed
Retail Price Index-Linked Bonds SFR 458 million European Investment Bank
Loan 2007. £200 million European Investment Bank Loan
2012. The
guaranteed retail price index-linked bonds are guaranteed by Ambac Assurance UK
Limited, and the European Investment Bank loans are guaranteed by National Grid
Transco plc. (3)As at 31 March 2004, NGC had
issued performance bonds in the ordinary course of business amounting to
£8.2 million and NGC had issued guarantees in respect of the performance
of a third party of up to £14.0 million. (4)The information contained in this Statement
is extracted without material adjustment from NGCs audited consolidated
financial statements as at 31 March 2004, except for the profit and
loss account, and other reserves figures, which have been restated for the
effect of the adoption of Financial Reporting Standard (FRS) 20 Accounting for
Share Based Payments. Before restatement, the figures were £357 million, £0
million, respectively. (5)As at 30 September 2004, the Total
Indebtedness of NGC increased by £303 million as compared to
£2,829 million at 31 March 2004. This is mainly due to the
repayment of inter-company loans. Aside from this, there has been no other
material change in the capitalisation and indebtedness, contingent liabilities
or guarantees of NGC since 31 March 2004. (6)As at 31 March 2004, the NGC
Group had cash and short-term money market investments of £27.1 million.


UNITED KINGDOM TAXATION  The
following is a summary of the United Kingdom withholding taxation treatment at
the date hereof in relation to payments of principal and interest in respect of
the Instruments. The comments do not deal with other United Kingdom tax aspects
of acquiring, holding or disposing of Instruments. The comments relate only to
the position of persons who are absolute beneficial owners of the Instruments.
Prospective Instrumentholders should be aware that the particular terms of
issue of any series of Instruments as specified in the relevant Pricing
Supplement may affect the tax treatment of that and other series of Instruments.
The following is a general guide and should be treated with appropriate
caution. Instrumentholders who are in any doubt as to their tax position should
consult their professional advisers. Instrumentholders who may be liable to
taxation in jurisdictions other than the United Kingdom in respect of their
acquisition, holding or disposal of the Instruments are particularly advised to
consult their professional advisers as to whether they are so liable (and if so
under the laws of which jurisdictions), since the following comments relate
only to certain United Kingdom taxation aspects of payments in respect of the
Instruments. In particular, Instrumentholders should be aware that they may be
liable to taxation under the laws of other jurisdictions in relation to
payments in respect of the Instruments even if such payments may be made
without withholding or deduction for or on account of taxation under the laws
of the United Kingdom.  1.UK WITHHOLDING TAX ON UK SOURCE
INTEREST  1.1The Instruments issued by an Issuer which carry a
right to interest (UK Instruments) will constitute quoted Eurobonds
provided they are and continue to be listed on a recognised stock exchange
within the meaning of Section 841 of the Income and Corporation Taxes Act
1988. On the basis of the United Kingdom Inland Revenues published
interpretation of the relevant legislation, securities which are to be listed
on a stock exchange in a country which is a member state of the European Union
or which is part of the European Economic Area will satisfy this requirement if
they are listed by a competent authority in that country and are admitted to
trading on a recognised stock exchange in that country; securities which are to
be listed on a stock exchange in any other country will satisfy this
requirement if they are admitted to trading on a recognised stock exchange in
that country. The London Stock Exchange is a recognised stock exchange for
these purposes. Whilst the UK Instruments are and continue to be quoted
Eurobonds, payments of interest on the UK Instruments may be made without
withholding or deduction for or on account of United Kingdom income tax.  1.2In all cases falling outside the exemption
described in 1.1 above, interest on the UK Instruments may fall to be paid
under deduction of United Kingdom income tax at the lower rate (currently 20
per cent.) subject to such relief as may be available under the provisions of
any applicable double taxation treaty. However, this withholding will not apply
if the relevant interest is paid on Instruments with a maturity date of less
than one year from the date of issue and which are not issued under
arrangements the effect of which is to render such Instruments part of a
borrowing with a total term of a year or more.  2.PROVISION OF INFORMATION  Instrumentholders
should note that where any interest on Instruments is paid to them (or to any
person acting on their behalf) by the relevant Issuer or any person in the
United Kingdom acting on behalf of such Issuer (a paying agent), or is received
by any person in the United Kingdom acting on behalf of the relevant
Instrumentholder (other than solely by clearing or arranging the clearing of a
cheque) (a collecting agent), then the relevant Issuer, the paying agent or
the collecting agent (as the case may be) may, in certain cases, be required to
supply to the United Kingdom Inland Revenue details of the payment and certain
details relating to the Instrumentholder (including the Instrumentholders name
and address). These provisions will apply whether or not the interest has been
paid subject to withholding or deduction for or on account of United Kingdom
income tax and whether or not the Instrumentholder is resident in the United
Kingdom for United Kingdom taxation purposes. Where the Instrumentholder is not
so resident, the details provided to the United Kingdom Inland Revenue may, in
certain cases, be passed by the United Kingdom Inland Revenue to the tax
authorities of the jurisdiction in which the Instrumentholder is resident for
taxation purposes.  The provisions
referred to above may also apply, in certain circumstances, to payments made on
redemption of any Instruments where the amount payable on redemption is greater
than the issue price of the Instruments.


EU Savings Directive  On 3 June 2003
the EU Council of Economic and Finance Ministers adopted a new directive
regarding the taxation of savings income. The directive is scheduled to be
applied by Member States from 1 July 2005, provided that certain non-EU
countries adopt similar measures from the same date. Under the directive each
Member State will be required to provide to the tax authorities of another
Member State details of payments of interest or other similar income paid by a
person within its jurisdiction to an individual resident in that other Member
State; however, Austria, Belgium and Luxembourg may instead apply a withholding
system for a transitional period in relation to such payments, deducting tax at
rates rising over time to 35 per cent. The transitional period is to commence
on the date from which the directive is to be applied by Member States and to
terminate at the end of the first fiscal year following agreement by certain
non-EU countries to the exchange of information relating to such payments.  Instrumentholders
should note paragraphs (a) to (f) of Condition 6 of the Terms and Conditions.  3.OTHER RULES RELATING TO UNITED KINGDOM
WITHHOLDING TAX  3.1Instruments may be issued at an issue price of
less than 100 per cent. of their principal amount. Any discount element on any
such Instruments will not be subject to any United Kingdom withholding tax
pursuant to the provisions mentioned in 1 above, but may be subject to
reporting requirements as outlined in 2 above.  3.2Where Instruments are to be, or may fall to be,
redeemed at a premium, as opposed to being issued at a discount, then any such
element of premium may constitute a payment of interest. Payments of interest
are subject to United Kingdom withholding tax and reporting requirements as
outlined above.  3.3Where interest has been paid under deduction of
United Kingdom income tax, Instrumentholders who are not resident in the United
Kingdom may be able to recover all or part of the tax deducted if there is an
appropriate provision in any applicable double taxation treaty.  3.4The references to interest above mean interest
as understood in United Kingdom tax law. The statements above do not take any
account of any different definitions of interest or principal which may
prevail under any other law or which may be created by the terms and conditions
of the Instruments or any related documentation.  3.5The above description of the United Kingdom
withholding tax position assumes that there will be no substitution of an
Issuer pursuant to Condition 10.3 of the Instruments and does not consider the
tax consequences of any such substitution.


PLAN OF DISTRIBUTION  Summary of Agreement  Subject to the terms
and on the conditions contained in a dealer agreement dated 6 December 2004
(as amended or supplemented from time to time), between the Issuers, the
Permanent Dealers and the Arranger (the Dealer Agreement), the Instruments
will be offered on a continuous basis by each of the Issuers to the Permanent
Dealers. However, the Issuers have reserved the right to issue Instruments
directly on their own behalf to dealers which are not Permanent Dealers. The
Instruments may also be issued by each of the Issuers through the Dealers,
acting as agents of the Issuers. The Dealer Agreement also provides for Instruments
to be issued in syndicated Tranches which are jointly and severally
underwritten by two or more Dealers. The commissions in respect of an issue of
Instruments on a syndicated basis will be stated in the relevant Pricing
Supplement. Each of the Issuers have agreed to indemnify the Dealers against
certain liabilities in connection with the offer and sale of the Instruments.  Selling Restrictions  United States  The Instruments have
not been and will not be registered under the U.S. Securities Act of 1933 as
amended (the Securities Act) and may not be offered or sold within the United
States or to, or for the account or benefit of, U.S. persons except in certain
transactions exempt from the registration requirements of the Securities Act.
Terms used in this paragraph have the meanings given to them by Regulation S
under the Securities Act.  Instruments in bearer
form having a maturity of more than one year are subject to U.S. tax law
requirements and may not be offered, sold or delivered within the United States
or its possessions or to a U.S. person, except in certain transactions
permitted by U.S. tax regulations. Terms used in this paragraph have the
meanings given to them by the U.S. Internal Revenue Code and regulations under
it.  Each Dealer has agreed
that, except as permitted by the Dealer Agreement, it will not offer, sell or
deliver the Instruments of any identifiable Tranche, (a) as part of their
distribution at any time or (b) otherwise until 40 days after completion
of the distribution of such Tranche as determined, and certified to the
relevant Issuer, by the Issuing and Paying Agent, or in the case of Instruments
issued on a syndicated basis, the Lead Manager, within the United States or to,
or for the account or benefit of, U.S. persons, and it will have sent to each
dealer to which it sells Instruments during the distribution compliance period
a confirmation or other notice setting forth the restrictions on offers and
sales of the Instruments within the United States or to, or for the account or
benefit of, U.S. persons.  In addition, until 40
days after the commencement of the offering, an offer or sale of Instruments
within the United States by any dealer (whether or not participating in the
offering) may violate the registration requirements of the Securities Act.  United Kingdom  Each Dealer has
represented, warranted and agreed that:  (a)No offer to public  listed Instruments: in relation to
Instruments which have a maturity of one year or more and which are to be
admitted to the Official List of the UK Listing Authority, it has not offered
or sold and will not offer or sell any such Instruments to persons in the
United Kingdom prior to admission of such Instruments to listing in accordance
with Part VI of the FSMA, except to persons whose ordinary activities involve
them in acquiring, holding, managing or disposing of investments (as principal
or agent) for the purposes of their businesses or otherwise in circumstances
which have not resulted and will not result in an offer to the public in the
United Kingdom within the meaning of the Public Offers of Securities
Regulations 1995 or the FSMA;  (b)No offer to public  unlisted Instruments: in relation to
Instruments which have a maturity of one year or more and which are not be
admitted to the Official List of the UK Listing Authority, it has not offered
or sold and, prior to the expiry of a period of six months from the Issue Date
of such Instruments, will not offer or sell any such Instruments to persons in
the United Kingdom except to persons whose ordinary activities involve them in
acquiring, holding, managing or disposing of investments (as principal or
agent) for the purposes of their businesses or otherwise in circumstances which
have not resulted and will not result in an offer to the public in the United
Kingdom within the meaning of the Public Offers of Securities Regulations 1995;


(c)No deposit-taking  in relation to any Instruments
having a maturity of less than one year from the date of their issue:  (i)it is a person whose ordinary
activities involve it in acquiring, holding, managing or disposing of
investments (as principal or agent) for the purposes of its business; and  (ii)it has not offered or sold and will not offer or
sell any Instruments other than to persons:  (1)whose ordinary activities involve them in acquiring, holding, managing or
disposing of investments (as principal or agent) for the purposes of their
businesses; or  (2)who it is reasonable to expect will acquire, hold, manage or dispose of
investments (as principal or agent) for the purposes of their businesses,  where the issue of the Instruments would otherwise
constitute a contravention of Section 19 of the FSMA by the relevant
Issuer;  (d)Financial promotion  it has only communicated or caused
to be communicated and it will only communicate or cause to be communicated any
invitation or inducement to engage in investment activity (within the meaning
of Section 21 of the FSMA) received by it in connection with the issue or
sale of any Instruments in circumstances in which Section 21(1) of the
FSMA does not apply to the relevant Issuer; and  (e)General compliance  it has complied and will comply with
all applicable provisions of the FSMA (and all rules and regulations made
pursuant to the FSMA) with respect to anything done by it in relation to any
Instruments in, from or otherwise involving the United Kingdom.  Japan  The Instruments have
not been and will not be registered under the Securities and Exchange Law of
Japan (the Securities and Exchange Law). Accordingly, each of the Dealers has
represented, warranted and agreed that it has not, directly or indirectly,
offered or sold and will not, directly or indirectly, offer or sell any
Instruments in Japan or to, or for the benefit of, any resident of Japan or to
others for re-offering or re-sale, directly or indirectly, in Japan or to, or
for the benefit of, any resident of Japan except pursuant to an exemption from
the registration requirements of, and otherwise in compliance with the
Securities and Exchange Law and other relevant laws and regulations of Japan.
As used in this paragraph, resident of Japan means any person resident in
Japan, including any corporation or other entity organised under the laws of
Japan.  General  These selling restrictions
may be modified by the agreement of the relevant Issuer and the Dealers
following a change in a relevant law, regulation or directive. Any such
modification will be set out in the Pricing Supplement issued in respect of the
issue of Instruments to which it relates or in a supplement to this Information
Memorandum.  Other than with
respect to the admission to listing, trading and/or quotation by such one or
more listing authorities, stock exchanges and/or quotation systems as may be
specified in the relevant Pricing Supplement, no action has been or will be
taken in any country or jurisdiction by the Issuers or the Dealers that would
permit a public offering of Instruments, or possession or distribution of any
offering material in relation thereto, in any country or jurisdiction where
action for that purpose is required. Persons into whose hands this Information
Memorandum or any Pricing Supplement comes are required by the Issuers and the
Dealers to comply with all applicable laws and regulations in each country or
jurisdiction in or from which they purchase, offer, sell or deliver Instruments
or have in their possession or distribute such offering material, in all cases
at their own expense.  Each Dealer has agreed
that it will comply with all relevant laws, regulations and directives in each
jurisdiction in which it purchases, offers, sells or delivers Instruments or
has in its possession or distributes this Information Memorandum, any other
offering material or any Pricing Supplement and neither the Issuers nor any
other Dealer shall have responsibility for such material.


FORM OF PRICING SUPPLEMENT  The Pricing
Supplement in respect of each Tranche of Instruments will be substantially in
the following form, duly supplemented (if necessary), amended (if necessary)
and completed to reflect the particular terms of the relevant Instruments and
their issue. Text in this section appearing in italics does not form part
of the form of the Pricing Supplement but denotes directions for completing the
Pricing Supplement.  Pricing
Supplement dated []  [NATIONAL GRID TRANSCO PLC/NATIONAL GRID COMPANY PLC  Issue of [Aggregate Nominal Amount of Tranche] [Title of
Instruments]
under the Euro 6,000,000,000 Euro Medium Term Note Programme  This document
constitutes the Pricing Supplement relating to the issue of Instruments
described herein. Terms used herein shall be deemed to be defined as such for
the purposes of the Conditions set out in the Information Memorandum dated 6 December 2004
[and the Supplemental Information Memorandum dated []]. This
Pricing Supplement contains the final terms of the Instruments and must be read
in conjunction with that Information Memorandum[, as so supplemented].  [The
following alternative language applies if the first tranche of an issue which
is being increased was issued under an Information Memorandum with an earlier
date.  Terms used herein
shall be deemed to be defined as such for the purposes of the Conditions (the Conditions)
set forth in the Information Memorandum dated [] [as
supplemented by] [Supplemental Information Memorandums dated []].
This Pricing Supplement contains the final terms of the Notes and must be read
in conjunction with the Information Memorandum dated 6 December 2004
[and the supplemental Information Memorandum dated [] 2004] save in respect of the
Conditions which are extracted from the Information Memorandum dated [] as
supplemented and are attached hereto.]  [Include
whichever of the following apply or specify as Not Applicable (N/A). Note
that the numbering should remain as set out below, even if Not Applicable is
indicated for individual paragraphs or sub-paragraphs.]  1.
  Issuer:
  
  [National Grid Transco plc/National Grid Company plc]*2.
  (i)Series Number:
  
  [](ii)Tranche Number:
  
  [][(If fungible with an existing Series, details of
  that Series, including the date on which the Instruments become fungible.)]3.
  Specified Currency or Currencies:
  
  []4.
  Aggregate Nominal Amount:[(i)] Series:
  
  [][(ii) Tranche:
  
  []]5.
  [(i)]Issue Price:
  
  [] per cent. of the Aggregate Nominal Amount
  [plus accrued interest from [insert date]
  (in the case of fungible issues only, if
  applicable)][(ii)Net proceeds:
  
  [] (Required only for listed
  issues  insert cash amount)]  
 *Delete as applicable  
   6.
  Specified Denominations:
  
  [](1)[]7.
  (i)Issue Date:
  
  [](ii)Interest Commencement Date:
  
  []8.
  Maturity Date:
  
  [specify date or (for Floating Rate Instruments)
  Interest Payment Date falling in or nearest to the relevant month and year][If the Instruments have a maturity of less than
  one year from the Issue Date, the Instruments must have a minimum redemption
  value of £100,000 (or its equivalent in other currencies) and be sold only to
  professional investors (or another applicable exemption from Section 19
  of the FSMA must be available).]9.
  Interest Basis:
  
  [[] per cent. Fixed Rate] [[specify
  reference rate] +/- [] per cent. Floating Rate] [Zero
  Coupon] [Index Linked Interest] [Other (specify)]
  (further particulars specified below)10.
  Redemption/Payment Basis:
  
  [Redemption at par][Index Linked Redemption][Dual Currency][Partly Paid][Instalment][Other (specify)]11.
  Change of Interest or Redemption/Payment Basis:
  
  [Specify details of any provision for
  convertibility of Instruments into another interest or redemption/payment
  basis]12.
  Put/Call Options(2)
  
  [NGC Restructuring Put] [Put] [Call]
  [(further particulars specified below)]13.
  Status of the Instruments:
  
  Senior14.
  Listing:
  
  [Applications have been made for the Instruments to be admitted to
  listing on the Official List of the UK Listing Authority and to trading on
  the London Stock Exchange/other (specify)/None]15.
  Method of distribution:
  
  [Syndicated/Non-syndicated]  PROVISIONS RELATING TO INTEREST (IF ANY) PAYABLE  16.
  Fixed Rate Instrument Provisions
  
  [Applicable/Not Applicable](If Not Applicable, delete the remaining
  sub-paragraphs of this paragraph)(i)Rate[(s)] of Interest:
  
  [] per cent. per annum [payable
  [annually/semi-annually/quarterly/monthly] in arrear]  
 (1)Instruments which have a maturity of less
than one year must have a minimum denomination of £100,000 (or its equivalent
in other currencies)  (2)If Instruments are issued by NGT, only
insert any additional put/call option other than the NGT Restructuring Put
contained in Condition 4.6.


(ii)Interest Payment Date[(s)]:
  
  [] in each year [adjusted in accordance with [specify Business Day Convention and any applicable Business
  Centre(s) for the definition of Business Day]/not adjusted](iii)Fixed Coupon Amount [(s)]:
  
  [] per [] in nominal amount(iv)Broken Amount:
  
  [Insert particulars of any initial or final broken
  interest amounts which do not correspond with the Fixed Coupon Amount [(s)]
  and the Interest Payment Date(s) to which they relate](v)Day Count Fraction (Condition 3.2.5):
  
  [](Day Count Fraction should be Actual/ Actual-ISMA
  for all fixed rate issues other than those denominated in U.S. dollars unless
  otherwise agreed)(vi)Determination Date(s) (Condition 3.2.5):
  
  [] in each year [insert
  regular payment dates, ignoring issue date or maturity date in the case of a
  long or short first or last coupon](3)(vii)Other terms relating to the method of
  calculating interest for Fixed Rate Instruments:
  
  [Not Applicable/give details]17.
  Floating Rate Instrument Provisions
  
  [Applicable/Not Applicable](If Not Applicable, delete the remaining
  sub-paragraphs of this paragraph.)(i)Interest Period(s):
  
  [](ii)Specified Interest Payment Dates:
  
  [](iii)Business Day Convention:
  
  [Floating Rate Business Day Convention/ Following Business Day
  Convention/ Modified Following Business Day Convention/Preceding Business Day
  Convention/other (give details)](iv)Business Centre(s) (Condition 3.2.5):
  
  [](v)Manner in which the Rate(s) of Interest is/are
  to be determined:
  
  [Screen Rate Determination/ ISDA Determination/ other (give details)](vi)Interest Period Date(s):
  
  [Not Applicable/specify dates](vii)Party responsible for calculating the Rate(s) of
  Interest and Interest Amount(s) (if not the Calculation Agent):
  
  [](viii)Screen Rate Determination
  (Condition 3.2.3(b)):Relevant Time:
  
  []Interest Determination Date:
  
  [[] [TARGET] Business Days in [specify city] for [specify currency] prior to [the
  first day in each Interest Accrual Period/ each Interest Payment Date]]  
 (3)Only to be completed for an issue where Day
Count Fraction is Actual/Actual-ISMA


Primary Source for Floating Rate:
  
  [Specify relevant screen page or Reference
  Banks]Reference Banks (if Primary Source is Reference Banks):
  
  [Specify five]Relevant Financial Centre:
  
  [The financial centre most closely connected to
  the Benchmark  specify if not London]Benchmark:
  
  [LIBOR, LIBID, LIMEAN, EURIBOR or other benchmark]Representative Amount:
  
  [Specify if screen or Reference Bank quotations
  are to be given in respect of a transaction of a specified notional amount]Effective Date:
  
  [Specify if quotations are not to be obtained with
  effect from commencement of Interest Accrual Period]Specified Duration:
  
  [Specify period for quotation if not duration of
  Interest Accrual Period](ix)ISDA Determination (Condition 3.2.3(a)):Floating Rate Option:
  
  []Designated Maturity:
  
  []Reset Date:
  
  []ISDA Definitions: (if different from those set out in the Conditions)
  
  [](x)Margin(s):
  
  [+/-] [] per cent. per annum(xi)Minimum Rate of Interest:
  
  [] per cent. per annum(xii)Maximum Rate of Interest:
  
  [] per cent. per annum(xiii)Day Count Fraction (Condition 3.2.5):
  
  [](xiv)Rate Multiplier:
  
  [](xv)Fall back provisions, rounding
  provisions, denominator and any other terms relating to the method of
  calculating interest on Floating Rate Instruments, if different from those
  set out in the Conditions:
  
  []18.
  Zero Coupon Instrument Provisions
  
  [Applicable/Not Applicable](If Not Applicable, delete the remaining sub-paragraphs of this
  paragraph)(i)Amortisation Yield
  (Condition 4.4):
  
  [] per cent. per annum(ii)Day Count Fraction
  (Condition 3.2.5):
  
  [](iii)Any other formula/basis of determining amount
  payable:
  
  []19.
  Index Linked Interest Instrument Provisions
  
  [Applicable/Not Applicable] (If not Applicable,
  delete the remaining sub-paragraphs of this paragraph)(i)Index/Formula:
  
  [Give or annex details](ii)Calculation Agent responsible for
  calculating the interest due:
  
  []


(iii)Provisions for determining Coupon where
  calculation by reference to Index and/or Formula is impossible or
  impracticable:
  
  [](iv)Interest Period(s):
  
  [](v)Specified Interest Payment Dates:
  
  [](vi)Business Day Convention:
  
  [Floating Rate Business Day Convention/ Following Business Day
  Convention/ Modified Following Business Day Convention/Preceding Business Day
  Convention/other (give details)](vii)Business Centre(s) (Condition 3.2.5):
  
  [](viii)Minimum Rate of Interest:
  
  [] per cent. per annum(ix)Maximum Rate of Interest:
  
  [] per cent. per annum(x)Day Count Fraction (Condition 3.2.5):
  
  []20.
  Dual Currency Instrument Provisions
  
  [Applicable/Not Applicable](If Not Applicable, delete the remaining sub-paragraphs of this
  paragraph)(i)Rate of Exchange/Method of
  calculating Rate of Exchange:
  
  [Give details](ii)Calculation Agent, if any,
  responsible for calculating the principal and/or interest due:
  
  [](iii)Provisions applicable where
  calculation by reference to Rate of Exchange impossible or impracticable:
  
  [](iv)Person at whose option
  Specified Currency(ies) is/are payable:
  
  [](v)Day Count Fraction
  (Condition 3.2.5):
  
  []PROVISIONS RELATING TO REDEMPTION21.
  Call Option(4)
  
  [Applicable/Not Applicable] (If Not Applicable,
  delete the remaining sub-paragraphs of this paragraph)(i)Optional Redemption
  Date(s):
  
  [](ii)Optional Redemption
  Amount(s) of each Instrument and method, if any, of calculation of such
  amount(s):
  
  [] per Instrument of [ ]
  specified denomination(iii)If redeemable in part:
  
  [](a)Minimum nominal amount to
  be redeemed:
  
  [](b)Maximum nominal amount to
  be redeemed:
  
  [](iv)Option Exercise Date(s):
  
  [](v)Description of any other
  Issuers option:
  
  [](vi)Notice period (if other
  than as set out in the Conditions):
  
  []  
 (4)    This does not include the tax call in
Condition 4.2


22.
  Put Option(5)
  
  [Applicable/Not Applicable](If Not Applicable, delete the remaining
  sub-paragraphs of this paragraph)(i)Optional Redemption
  Date(s):
  
  [](ii)Optional Redemption
  Amount(s) of each Instrument and method, if any, of calculation of such
  amount(s):
  
  [] per Instrument of [] specified denomination(iii)Option Exercise Date(s):
  
  [](iv)Description of any other
  Instrumentholders option:
  
  [](v)Notice period (if other
  than as set out in the Conditions):
  
  []23.
  NGC Restructuring Put Option:
  
  [Applicable/Not Applicable]24.
  Final Redemption Amount of each Instrument
  
  [[] per Instrument of [] specified denomination/Other/See
  Appendix]25.
  Early Redemption Amount(i)              Early
  Redemption Amount(s) of each Instrument payable on redemption for taxation
  reasons (Condition 4.2) or an Event of Default (Condition 8) and/or the
  method of calculating the same (if required or if different from that set out
  in the Conditions:
  
  [Final Redemption Amount/Other](ii)Redemption for taxation reasons
  permitted on days other than Interest Payment Dates (Condition 4.2):
  
  [Yes/No](iii)            Unmatured
  Coupons to become void upon early redemption. (Bearer Investments Only)
  (Condition 5.5):
  
  [Yes/No/Not Applicable]GENERAL PROVISIONS APPLICABLE TO THE
  INSTRUMENTS26.
  Form of Instruments:
  
  Bearer Instruments(i)Temporary or permanent Global
  Instrument:
  
  [temporary Global Instrument exchangeable for a permanent Global
  Instrument which is exchangeable for Definitive Instruments on 60 days
  notice in the limited circumstances specified in the permanent Global
  Instrument][temporary Global Instrument exchangeable for Definitive Instruments on
  40 days notice][permanent Global Instrument exchangeable for Definitive Instruments on
  60 days notice/at any time/ in the limited circumstances specified in the
  permanent Global Instrument](ii)Applicable TEFRA exemption:
  
  [C Rules/D Rules/Not Applicable]27.           Financial Centre(s)
  (Condition 5.6) or other special provisions relating to payment dates:
  
  [Not Applicable/Give details. italicNote that this item relates to the
  date and place of payment, and not interest period end dates, to which items
  16(ii), 17(iv) and 19(vii) relate]28.           Talons for future
  Coupons or Receipts to be attached to Definitive Instruments (and dates on
  which such Talons mature):
  
  [Yes/No. If yes, give details]  
 (5)    This does not include the NGT or NGC
Restructuring Put contained in Condition 4.6


29.        Details
  relating to Partly Paid Instruments: amount of each payment comprising the
  Issue Price and date on which each payment is to be made and consequences (if
  any) of failure to pay, including any right of the Issuer to forfeit the
  Instruments and interest due on late payment:
  
  [Not Applicable/give details]30.
  Details relating to Instalment Instruments:
  
  [Not Applicable/give details]Instalment Amount(s):
  
  []Instalment Date(s):
  
  []Minimum Instalment Amount:
  
  []Maximum Instalment Amount:
  
  []31.        Redenomination,
  renominalisation and reconventioning provisions:
  
  [Not Applicable/The provisions annexed to this Pricing Supplement apply]32.
  Consolidation provisions:
  
  [Not Applicable/The provisions annexed to this Pricing Supplement apply]33.
  Other terms or special conditions(6)
  
  [Not Applicable/give details]DISTRIBUTION34.
  If syndicated, names of Managers:
  
  [Not Applicable/give names]Stabilising Manager (if any):
  
  [Not Applicable/give name]Dealers Commission:
  
  []35.
  If non-syndicated, name of Dealer:
  
  [Not Applicable/give name]36.
  Additional selling restrictions:
  
  [Not Applicable/give details]OPERATIONAL INFORMATION37.
  ISIN Code:
  
  []38.
  Common Code:
  
  []39.        Any
  clearing system(s) other than Euroclear Bank S.A./N.V. and Clearstream
  Banking société anonyme and the relevant identification number(s):
  
  [Not Applicable/give name(s) and
  number(s)]40.
  Delivery:
  
  Delivery [against/free of] payment41.
  The Agents appointed in respect of the Instruments are:
  
  []  
 (6)If full terms and conditions are to be
used, please add the following here: ``The full text of the Conditions which
apply to the Instruments [and which will be endorsed on the Instruments in
definitive form] are set out in [the Annex to this Pricing Supplement], which
Conditions replece in their entirety those appearing in the Information
Memorandum for the purposes of these Instruments and such Conditions will prevail
over any other provisions to the contrary. The first set of bracketed words is
to be deleted where there is a permanent Global Instrument instead of
Instruments in definitive form. The full Conditions should be attached to the
form part of the Pricing Supplement.


GENERAL42.Additional steps that may only be taken
  following approval by an Extraordinary Resolution in accordance with
  Condition 10.1:
  
  [Not Applicable/give details]43.The aggregate principal amount of Instruments
  issued has been translated into Euro at the rate of [],
  producing a sum of (for Instruments not denominated in Euro):
  
  [Not Applicable/[[Euro]][]]  [Listing Application  This Pricing
Supplement comprises the final terms required for the Instruments described
herein to be admitted to the Official List of the UK Listing Authority and
admitted to trading by the London Stock Exchange pursuant to the admission to
listing and trading of the Euro 6,000,000,000 Euro Medium Term Note Programme
of National Grid Transco plc and National Grid Company plc.]  [Stabilising  In connection with
this issue, [insert name of the Stabilising Manager]
(the Stabilising Manager) or any person acting for the Stabilising Manager
may over-allot or effect transactions with a view to supporting the market
price of the Instruments at a level higher than that which might otherwise
prevail for a limited period after the Issue Date. However, there may be no
obligation on the Stabilising Manager or any agent of the Stabilising Manager
to do this. Such stabilising, if commenced, may be discontinued at any time and
must be brought to an end after a limited period. Such stabilising shall be in
compliance with all applicable laws, regulations and rules.]  Responsibility  The Issuer accepts
responsibility for the information contained in this Pricing Supplement which,
when read together with the Information Memorandum referred to above, contains
all information that is material in the context of the issue of the
Instruments.  Signed on behalf of
the Issuer:  By:  Duly authorised


GENERAL INFORMATION  1.The admission of the Programme to
listing on the Official List of the UK Listing Authority and to trading on the
London Stock Exchange is expected to take effect on or about 9 December 2004.
The listing of the Instruments on the Official List will be expressed as a
percentage of their nominal amount (exclusive of accrued interest). Any Tranche
of Instruments intended to be admitted to listing on the Official List of the
UK Listing Authority and admitted to trading on the London Stock Exchange will
be so admitted to listing and trading upon submission to the UK Listing
Authority and the London Stock Exchange of the relevant Pricing Supplement and
any other information required by the UK Listing Authority and the London Stock
Exchange, subject in each case to the issue of the relevant Instruments. Prior
to official listing, dealings will be permitted by the London Stock Exchange in
accordance with its rules. Transactions will normally be effected for delivery
on the third working day in London after the day of the transaction.  However, Instruments may be issued pursuant to the Programme which will
not be admitted to listing, trading and/or quotation by the UK Listing
Authority or the London Stock Exchange or any other listing authority, stock
exchange and/or quotation system or which will be admitted to listing, trading
and/or quotation by such listing authority, stock exchange and/or quotation
system as the relevant Issuer and the relevant Dealer(s) may agree.  2.The Issuers have obtained all necessary
consents, approvals and authorisations in the United Kingdom in connection with
the issue and performance of the Instruments.  3.The establishment of the Programme was
authorised by a resolution of the Finance Committee of the Board of Directors
of NGT (which was established by a resolution of the Board of Directors of NGT
passed on 21 October 2002) passed on 23 October 2002 and by a
resolution of the Finance Committee of the Board of Directors of NGC (which was
established by a resolution of the Board of Directors of NGC passed on 19 November 2002)
passed on 19 November 2002.  4.The update of the Programme was
authorised by a resolution of the Finance Committee of the Board of Directors
of NGT (which was established by a resolution of the Board of Directors of NGT
passed on 21 October 2002) passed on 28 October 2004 and by a
resolution of the Finance Committee of the Board of Directors of NGC (which was
established by a resolution of the Board of Directors of NGC passed on 19 November 2002)
passed on 28 October 2004.  5.Instruments have been accepted for
clearance through the Euroclear and Clearstream, Luxembourg. The appropriate
common code and the International Securities Identification Number in relation
to the Instruments of each Series will be specified in the Pricing Supplement
relating thereto. The relevant Pricing Supplement shall specify any other
clearing system as shall have accepted the relevant Instruments for clearance
together with any further appropriate information.  6.Save as disclosed in this paragraph,
there are no legal or arbitration proceedings (including any such proceedings
which are pending or threatened of which NGT is aware) which may have or have
had in the 12 months preceding the date of this Information Memorandum a
significant effect on the NGT Groups financial position.  (a)On 10 January 2002, New York State filed a
civil action against Niagara Mohawk in US District Court in Buffalo, New York,
for alleged violations of the federal Clean Air Act, related state
environmental laws and the common law at the Huntley and Dunkirk power plants,
which Niagara Mohawk sold in 1999 to affiliates of NRG Energy, Inc.
(collectively with its affiliates, NRG). The State alleged, among other things,
that between 1982 and 1999, Niagara Mohawk modified the two plants 55 times
without obtaining proper preconstruction permits and implementing proper
pollution equipment controls.  On 27 March 2003, the court issued an order granting in part Niagara
Mohawks motion to dismiss, which had been filed in 2002. Based on applicable
statutes of limitations, the court reduced the number of projects allegedly
requiring preconstruction permits under the Clean Air Act from 55 to nine.  On 31 December 2003, the court granted the States motion to amend
the complaint, allowing it to assert operating permit violations against
Niagara Mohawk and NRG, though still barring monetary penalties for actions
outside the statute of limitations period. Niagara Mohawk answered the amended
complaint on 2 March 2004 and filed a counterclaim against the State in
response to its common law


public nuisance claim, seeking contribution for the companys portion of
any alleged harm caused by emissions from facilities that the State owns or to
which it has given permits.  Prior to the commencement of the enforcement action, NRG took the position
that Niagara Mohawk would be at least partly responsible for the costs of
pollution control equipment and post-sale fines and penalties, notwithstanding
contrary language in the agreement governing the sale of the plants to NRG. As
a result, on 13 July 2001, Niagara Mohawk sued NRG in New York State
Supreme Court (Onondaga County), seeking a declaratory ruling that under the
agreement, NRG is responsible for the costs of pollution controls and
mitigation, as well as post-sale fines and penalties, that may result from the
States enforcement action. The parties are awaiting a decision on NRGs
partial summary judgment motion, which was argued on 15 January 2004.
The courts decision has been delayed pending the hearing judges determination
of whether to withdraw due to a perceived conflict of interest. It is not
possible to quantify the claim.  (b)In November 1999, New England Power (NEP), a
subsidiary of National Grid USA, entered into an agreement with Northeast
Utilities (NU) to settle claims made by NEP in relation to the operation of the
Millstone 3 nuclear unit. As part of this agreement, NU agreed to include NEPs
16.2 per cent. share in an auction of NUs share in that unit, at a guaranteed
price, irrespective of the price actually received at auction. On 31 March 2001,
the Millstone 3 sale was completed and proceeds of US28m were received by NEP.
Millstone 3 was subsequently sold to Dominion Resources Inc. for a total of
approximately US$855m. Regulatory authorities from Rhode Island, New Hampshire
and Massachusetts have expressed an intent to challenge the reasonableness of
the settlement agreement as NEP would have received approximately US$140m of
sale proceeds without the agreement. Any dispute will be resolved by the
Federal Energy Regulatory Commission (FERC). The Group believes that it acted
prudently since the amount received under the settlement agreement was the
highest sale price for a nuclear unit at the time the agreement was reached. It
is not possible to quantify the claim.  (c)Following a fatal accident in Larkhall,
Lanarkshire in December 1999 in which four people died, Transco faces
charges alleging breaches of sections 3 and 33 of the Health & Safety at
Work Act 1974. The case is listed for trial in Edinburgh commencing on 29 November 2004.
The maximum penalty for breach of either of the above sections is an unlimited
fine.  (d)Following a fatal accident at Cavendish Mill,
Lancashire in November 2001, in which one person died, Transco has been
charged with contravention of section 3 of the Health and Safety at Work
Act 1974. The maximum penalty for breach of this section is an unlimited
fine.  7.There are no legal or arbitration
proceedings (including any such proceedings which are pending or threatened of
which NGC is aware) which may have or have had in the 12 months preceding the
date of this Information Memorandum a significant effect on the NGC Groups
financial position.  8.Save as disclosed herein, there has
been no significant change in the financial or trading position of NGT or the
NGT Group since 30 September 2004 and no material adverse change in the
financial position or prospects of NGT or the NGT Group since 31 March 2004.  9.There has been no significant change in
the financial or trading position of NGC or the NGC Group since 31 March 2004
and no material adverse change in the financial position or prospects of NGC or
the NGC Group since 31 March 2004.  10.PricewaterhouseCoopers (Chartered Accountants) has
audited the accounts of NGT (formerly National Grid Group plc) for the year
ended 31 March 2002. Pricewaterhouse Coopers LLP has audited the accounts
of NGT (formerly National Grid Group plc) for the two years ended 31 March 2004.
The audited accounts for NGT contain unqualified reports.  11.PricewaterhouseCoopers (Chartered Accountants) has
audited the accounts of NGC for the year ended 31 March 2002.
Pricewaterhouse Coopers LLP has audited the accounts of NGC for the two years
ended 31 March 2004. The audited accounts for NGC contain unqualified
reports.  12.Each Instrument, Receipt, Coupon and Talon will
bear the following legend: Any United States person who holds this obligation
will be subject to limitations under the United States income tax laws,
including the limitations provided in Sections 165(j) and 1287(a) of the
Internal Revenue Code.  13.For so long as the Programme remains in effect or
any Instruments are outstanding, copies of the following documents may be
inspected during usual business hours on any weekday (Saturdays, Sundays and
public


holidays excepted), for inspection at the offices of JPMorgan Chase Bank,
N.A. at Trinity Tower, 9 Thomas More Street, London E1W 1YT and at the registered
offices of each of the Issuers:  (a)a copy of this Information Memorandum together
with any supplement to this Information Memorandum or further Information
Memorandum;  (b)the Trust Deed (which includes the form of the
Global Instruments, the Definitive Instruments, the Coupons, the Receipts and
the Talons);  (c)the Agency Agreement;  (d)the Dealer Agreement;  (e)the Memorandum and Articles of Association of each
of the Issuers;  (f)the audited consolidated accounts of
NGT (formerly known as National Grid Group plc) for the two financial years
ended 31 March 2004 and any consolidated interim accounts of NGT published
subsequently to such accounts;  (g)the audited consolidated accounts of NGC for the
two financial years ended 31 March 2004 and any consolidated interim
accounts of NGC published subsequently to such accounts; and  (h)any Pricing Supplement relating to Instruments
which are admitted to listing, trading and/or quotation by any listing
authority, stock exchange and/or quotation system. (In the case of any
Instruments which are not admitted to listing, trading and/or quotation by any
listing authority, stock exchange and/or quotation system, copies of the
relevant Pricing Supplement will only be available for inspection by the relevant
Instrumentholders.)


REGISTERED OFFICE OF EACH OF THE ISSUERS  1-3 Strand
London WC2N 5EH   THE ARRANGER AND AUTHORISED ADVISER  HSBC Bank plc8 Canada Square
London
E14 5HQ   THE DEALERS  ABN AMRO Bank N.V.250
  Bishopsgate
  London EC2M 4AA
  Banc of America Securities
  Limited5 Canada
  Square
  London E14 5AQBarclays Bank PLC5 The North
  Colonnade
  Canary Wharf
  London E14 4BB
  Citigroup Global Markets
  LimitedCitigroup
  Centre
  Canada Square
  Canary Wharf
  London E14 5LBDeutsche Bank AG LondonWinchester
  House
  1 Great Winchester Street
  London EC2N 2DB
  Dresdner Bank AG London
  BranchRiverbank
  House
  2 Swan Lane
  London ECUR 3UXHSBC Bank plc8 Canada
  Square
  London E14 5HQ
  National Australia Bank
  Limited88 Wood
  Street
  London EC2V 7QQRoyal Bank of Canada Europe
  Limited71 Queen
  Victoria Street
  London EC4V 4DE
  The Royal Bank of Scotland
  plc135
  Bishopsgate
  London EC2M 3UR  Mitsubishi Securities International plc6 Broadgate
London EC2M 2AA  LEGAL ADVISERS  To the Dealers and to the Trustee  Clifford Chance
Limited Liability Partnership10 Upper Bank
Street
London E14 5JJ  To the Issuers  LinklatersOne Silk Street
London EC2Y 8HQ


THE TRUSTEE  The Law Debenture Trust Corporation p.l.c.Fifth Floor
100 Wood Street
London EC2V 7EX   ISSUING AND PAYING AGENT  JPMorgan Chase Bank, N.A.Trinity Tower
9 Thomas More Street
London E1W 1YT  PAYING AGENT  Kredietbank S.A. Luxembourgeoise43 Boulevard
Royal
L-2955 Luxembourg   REGISTERED AUDITORS TO EACH OF THE ISSUERS  PricewaterhouseCoopers LLP1 Embankment
Place
London WC2N 6RH