Valentia Telecommunications has blocked the release of details about the tax changes made by the Minister for Finance to facilitate its takeover of Eircom.

The company, chaired by Sir Anthony O'Reilly, has appealed to the Information Commissioner over the decision by the Department of Finance to release the relevant files under the Freedom of Information Act.

The backlog of files currently being reviewed by the commissioner means that it could be months or years before a decision is reached on the appeal. The company then has the option of going to court to stop the release of the files.

Valentia, which is led by Providence Equity Partners, a US leveraged buyout fund, needed a number of unspecified changes made to the tax laws in order to allow the Eircom Employee Share Ownership Trust to become a member of the consortium. Without the changes, the beneficiaries of the trust may have become liable for tax on the shares in Eircom which were granted to them ahead of the company's flotation in 1999.

The ESOT owns just under 15 per cent of Eircom and its support for Valentia was the critical factor in the battle with eIsland for the former Telecom Eireann. The Department of Finance files would shed light on how and why the Minister for Finance, Mr McCreevy agreed to make the changes.

Shareholders owning 85 per cent of the shares in Eircom have now agreed to accept the €3 billion (€2.36 billion) bid from Valentia, but the offer has not been declared unconditional because it still needs regulatory clearance. The Tβnaiste, Ms Harney, has to decide in the next 14 days whether or not the takeover should be referred to the Competition Authority. This could delay approval by up to three months, or lead to conditions being attached.

The main issue of concern is Sir Anthony's holding in Independent News & Media and indirectly in Chorus, the largest cable company in Ireland, outside Dublin. There has been intensive correspondence between Valentia and the Department of Enterprise and Employment on the issue in recent weeks. The consortium is prepared to give assurances on how Eircom would be run to the Department to try and head off a referral to the Competition Authority.

A spokesman for Valentia declined to comment on reports that Sir Anthony has volunteered to exclude himself from any discussions at board level involving Chorus.

It has also been reported that the Irish Takeover Panel has told Valentia that it must declare the offer unconditional by November 2nd, or shareholders will be released from their commitments to accept the offer.

This could free Comsource, owner of 35 per cent of the firm, from its undertaking to accept the offer. The support of the Dutch-Swedish group is also necessary, but in the absence of any other bid on the table, it can be expected to continue to support Valentia. EIsland has withdrawn its offer.