Employee shareholders at ESB have said that they will resist any attempt to transfer assets out of the company.

In a White Paper on Energy published this week, the Government outlined its intention to move ESB's transmission assets to a separate company, EirGrid. The national transmission network is owned by ESB, but operated independently by EirGrid.

The trustees of the Employee Share Ownership Plan (Esop), which owns a 5 per cent stake in the company, said that such a move would destroy "the most valuable, efficient and effective" semi-State company in Ireland.

The trustee board said that it would take any steps necessary to prevent the commandeering of ESB's assets, which would devalue its members' shareholdings. "The assets of the ESB are no longer 'State assets'," it argued. "Their value cannot be destroyed to suit an ill-considered strategy of Government."

In a response to the trustees' concerns issued last night, the Department of Communications, Marine and Natural Resources said the Government was prepared to work with ESB management, unions and the "minority shareholder" Esop, in order to ensure a satisfactory outcome which addresses all "legitimate" concerns. However, the department appeared intent on pushing through the changes, as it said that any such negotiations would form "part of the process of implementing these decisions".

The department insisted that ESB would remain a commercially viable entity after the assets are transferred to EirGrid, and said that the structure would conform to European norms.

"Far from weakening the ESB in any way, both ESB and EirGrid will be stronger and more strategic as a result of these decisions," it said.

However, the Esop trustees said that splitting up ESB in this way would not cut costs but would duplicate management costs and other overheads. "Breaking up ESB without having a proven reason to do so will destroy an enormous sum in shareholder value for the State and for Esop members without delivering any guaranteed advantage to the consumer," it insisted.

Six of the main unions at ESB have also weighed into the fracas, warning that their members will oppose the Government's plans.

"Meetings have been sought with ESB management and the Government after which, if the necessary changes are not made to the proposals, the unions will initiate whatever action they deem necessary to prevent their implementation," the unions said.