The Tanaiste, Ms Mary Harney, is to meet the unions at Irish Fertilizer Industries this week to discuss the possible sale of the company. ICI, which has a 49 per cent interest in the company, has recently disposed of its fertilizer interests and would like to sell its stake.

The State owns the remaining 51 per cent of the company but is not thought to be interested in buying ICI's share.

The IFI chairman, Mr Niall Welch, has made no secret of his wish to see the company privatised, although its reliance on one cyclical business area means it would not appear to be an overly attractive candidate for flotation at the moment.

The company has yet to act on its intentions to diversify into other related but less cyclical businesses.

It is understood that Ms Harney has not yet made the decision whether the company should be offered as a straight sale or should be floated on the stock market.

The agri-business IAWS group is also understood to be interested. In addition, a number of large international concerns are also likely to look at the detail. One possible problem with a IAWS takeover would be the possible dominance of the new group in the marketplace. IAWS already owns the large fertilizer group Gouldings.

A spokesman for the Irish Farmers Association said they will be watching the situation very closely. "We would have grave concerns if any monopoly type situation were to emerge in the fertilizer industry. And from a farmers point of view the more competition there is in the market the better."

The sell-off is also coming at a time when the EU is understood to be considering imposing restrictions on the importation of fertilizer from outside the area.

Earlier this year, IFI reported a sharp downturn in profits because of a fall in worldwide fertilizer prices.

The transition from the state sector to a publicly quoted company has been successful for companies such as Greencore in the past.