RTE's expected return from the sale this year of its transmission network has diminished significantly, according to senior company sources.

Citing falling values in the technology, media and telecoms sectors, certain figures at the State broadcaster believe the network - incorporating 130 masts throughout the State - is now likely to generate a return near the low end of the £40-£70 million (€51E 89 million) valuation range mooted last year.

Others close to the sale process are understood to believe the masts could yet generate the higher figure.

Difference over the network's potential value prompted a serious disagreement in 1999 and 2000 between RTE and the Department of Arts, Heritage, Gaeltacht and the Islands.

While RTE claimed the network could be worth up to £70 million, the Department's advisers, AIB Capital Markets, valued it in the £40 million range.

A memo to the Minister, Ms de Valera, described an "apparently unbridgeable gap".

Dated November 29th, 1999 - before changes to the Broadcasting Bill facilitating the sale - the memo from an assistant secretary at the Department, Mr Michael Grant, said delays in the process were caused because the quality of RTE's records was not good.

Released under the Freedom of Information Act, it said: "These and other difficulties that emerged as the project got under way necessitated the diversion of a significant amount of resources by RTE to produce records of sufficient quality to enable the Government advisers to be happy that they would not be detrimental to the sale process."

The Bill enabling the sale is now law. It provides for the sale of 72 per cent of the network to a company outside RTE, with the State broadcaster retaining 28 per cent.

Talks on an employee share option plan to grant 5 per cent of the network to its 90 staff have yet to be concluded.

Staff would not pay for these free shares, which would be granted in return for their transfer to the purchaser. Staff are represented by SIPTU, the Seaman's Union of Ireland and the RTE Managers' Association.

About eight groups are believed to have made initial expressions of interest in the network, which is expected to be sold by June.

They include: BT, which owns Esat; NTL, which owns RTE's former Cablelink business; Crown Castle, which operates the former BBC network in Britain; the French group, Telediffusion de France; Chorus, a company part-owned by Independent News & Media; and the US group America-Tel.