The government's safety watchdog is cracking down on Britain's biggest and oldest nuclear complex after a series of radioactive leaks and safety blunders, despite private sector managers receiving multimillion-pound "performance-related" payments from the Nuclear Decommissioning Authority.

The Health and Safety Executive (HSE) has closed down a vital nuclear waste plant at Sellafield in Cumbria, and is taking legal action to force the site's operators to improve their flawed safety procedures.

The HSE has also rejected a £40bn plan for cleaning up Sellafield because of proposed delays in dismantling ageing and potentially hazardous facilities.

The disclosures come at a critical time for the nuclear industry which is trying to convince Chris Huhne, the energy and climate change secretary, it is efficient enough to build a new generation of reactors.

But the crackdown is also embarrassing because Nuclear Management Partners (NMP) – a consortium involving Amec, URS and Areva – is believed to have made "profits" of up to £50m over a 12-month period.

NMP took over control of Sellafield in November 2008 and was given the opportunity to win incentive payments if it improved the efficiency of Europe's biggest atomic site over the first 12 months. A spokesman for Amec confirmed "fees were paid" but said he was unable to give further details.

The decommissioning agency said the private companies had received £16.5m for the first four months of their work but it said figures for the last financial year would be published in July. It said the maximum under the contract could be £50m – in line with £16.5m for four months – and independent industry experts believe NMP won close to that top figure.

The HSE's latest report on Sellafield, posted online, discloses a litany of problems at the crowded site which sprawls over six square miles on the edge of the Lake District and is home to more than a thousand nuclear facilities, some dating back more than 50 years.

One of the main plants for solidifying highly radioactive liquid waste has been shut for safety reasons since 31 March, the report said. The case for continuing to operate the facility safely has been deemed "inadequate" by HSE inspectors.

According to the report, HSE has also taken enforcement action after cooling water needed to prevent highly radioactive waste tanks from overheating leaked twice in 10 months. Sellafield has been ordered to rectify an alleged breach of its safety licence – failing to give staff proper training – by 18 June.

HSE has taken further regulatory action over a leak of radioactively contaminated water from a pipe during nuclear fuel reprocessing operations. Along with another government watchdog, the Environment Agency, it has ordered Sellafield to correct breaches of radiation rules that enabled the leakage to occur.

The HSE report, which covers the first three months of this year, revealed there had been two other leaks in evaporators which process "highly active liquor". Sellafield is also criticised for taking more than 18 months to fix "known defects" with the fire protection systems at the thermal oxide reprocessing plant.

The HSE said the site will fail to meet a deadline of 1 August for clearing radioactive sludge out of old ponds and repackaging it into steel containers. The watchdog also has "concerns" about the management of change on the part of the site still known as Windscale.

In addition, HSE has refused to endorse the latest "lifetime plan" for Sellafield outlining schedules for decommissioning plants over the next 110 years. "It will not be a plan we can accept," its report said, because of worries about the "deferral dates for some facilities".

Sellafield is home to "the world's most dangerous stockpile of high-level liquid waste," according to Marianne Birkby, from the anti-nuclear group, Radiation Free Lakeland. "The evidence shows the industry cannot safely look after its existing wastes."

Sellafield Ltd, the company that runs the site, conceded there were "challenges" due to "ageing facilities and assets". "The new NMP team has been specifically brought in to improve on the historic record and is already delivering significant improvements and results," said a company spokesman. The site has been given £1.5bn this year – its highest level of funding to date – to reduce the hazards.

The spokesman added: "We have a clear focus on hazard and risk reduction on the site and have prioritised our significant resources at those areas that present the most difficult challenges."

The HSE said it will continue to highlight problems at Sellafield. "Our inspectors closely regulate operations on the site and on occasion where required will take enforcement action," said an HSE spokeswoman. "We are satisfied that Sellafield Ltd recognises, and is taking steps to effectively manage the risks and hazards on the site."