By Rebekah Curtis LONDON (Reuters) - British blue-chip shares rose 0.5 percent early on Friday, as British Energy powered ahead on receiving bid approaches at a premium and British Airways climbed after setting its first dividend since 2001. Heavyweight oil stocks tracked higher with crude prices, which approached $125 a barrel, led by the bullish heating oil market as China and Europe scramble for barrels, thinning global supply. Oil major BP and its rival Royal Dutch Shell both added 1.1 percent and BG Group put on 1.4 percent. Nuclear power generator British Energy leapt 5.7 percent to 718.5 pence to top the FTSE 100 leaderboard after saying it had received a range of takeover proposals, including some priced above Thursday's 680-pence close. For more double-click on. Centrica, which rose 0.3 percent, and France's EDF were prepared to make offers at less than 700p/share, sources familiar with the matter told Reuters last week. By 0752 GMT the FTSE 100 was up 34 points at 6,285.8, as shares rose across Europe. Overnight U.S. stocks rose, with the S&P 500 hitting its highest close since January. "Confidence does seem to be coming from the suggestion that the U.S. economy has ridden out the storm...so the FTSE may have more legs in it even yet," said Neil Parker, a strategist at Royal Bank of Scotland. "(But) there's still a lot of nervousness out there. By no means are we going into this blind, there are still a lot of people trading very cautiously," he added. "I don't want to pour cold water on what is a decent picture, but ...investors are likely to prove reluctant to drive this current rally much further," RBS's Parker added. BA, BANKS GIVE INDEX A LIFT British Airways (BA) added 3.6 percent after unveiling a 5 pence per share dividend and lifting annual profits 45 percent. BA also said that as a result of further hedging, it now expected every $1 change in the crude oil price to affect profit by 16 million pounds, down from 18 million previously. Banks gained broadly, with Alliance & Leicester, Lloyds TSB and HBOS each adding about 1 percent. The UK's biggest banks are preparing to swap 80-90 billion pounds of mortgage-backed assets for Treasury bills with the Bank of England, nearly twice as much as the central bank originally envisaged, the Financial Times reported. The scheme was put in place to unblock the bank-lending market, the paper said. | 
