The long awaited separation of the national grid from the ESB could happen this summer, the Minister for Communications, Noel Dempsey said yesterday.

Mr Dempsey said he wanted a new entity - EirGrid - to come into existence as soon as possible. He said negotiations were progressing well between various parties involved in the issue.

"As the shareholder on behalf of the Government, I expect the momentum of progress to be maintained and residual problems resolved during the summer," he said. He was speaking at the opening of the national grid's new control centre in Dublin.

The separation of the unit currently known as ESB National Grid from the ESB Group was supposed to happen several years ago, but it has been beset by problems. Various ministers have expressed frustration at the lack of progress, including Mr Dempsey's predecessor Dermot Ahern.

About 120 ESB employees will be required to transfer from the ESB Group to EirGrid before the new body can come into existence.

A detailed transfer agreement is needed for this to happen, but so far concerns over pensions and the employee's shareholdings in the ESB have provided major obstacles.

Also speaking at the same event was Dermot Byrne, the managing director of ESB National Grid. He said the grid company would shortly be moving out of the ESB Group's head offices in Dublin city centre.

The new control centre, currently located in the ESB's head offices, will move into the new premises.

In relation to the separation he said: "Negotiations are under way between ESB and EirGrid and our ESB employees on the conditions of their transfer to EirGrid. You can be sure that we are all pushing very hard to bring these negotiations to a successful conclusion as soon as possible".

Meanwhile Mr Dempsey said he expected to appoint consultants shortly to carry out a "root and branch" review of the whole energy sector, including the future of the ESB itself.