The Government has decided to reappoint ESB chairman Tadhg O'Donoghue for five more years.

The decision was announced yesterday by the Minister for Communications, Noel Dempsey. Mr O'Donoghue's reappointment was opposed by some union members, but the Government favours continuity at the company, sources indicated yesterday.

Mr Dempsey has ordered a wide-ranging review of the ESB and the energy sector generally. The review is being carried out by Deloitte and an interim report is expected to be completed shortly. The review may recommend the sale of some ESB power stations in order to reduce the company's dominance of the market.

This week, the ESRI suggested the ESB sell off up to 1,000 megawatts. This would amount to about three power stations.

If the review recommends major change it will fall on Mr O'Donoghue to formulate the company's response, along with chief executive Padraig McManus.

Mr O'Donoghue was paid €66,346 as chairman last year. Known for his plain-speaking style, Mr O'Donoghue was accused earlier this year of effectively dismissing deputy chairman Joe LaCumbre during a boardroom row. Following the intervention of Mr Dempsey, the row was defused and Mr LaCumbre continued in his position on the board, where he sits as a worker director.

The Minister said Mr O'Donoghue had presided over the board during a period of extraordinary change within the company and in the energy sector. "This includes the implementation of the PACT [Programme to Achieve Competitiveness and Transformation] agreement and the full liberalisation of the electricity sector," he said.

Mr O'Donoghue was first appointed to the ESB board in September 2000 and was appointed chairman in January 2001. He was previously a senior international partner with PricewaterhouseCoopers, chairman of Bórd Iascaigh Mhara and president of the American Chamber of Commerce in Ireland.