THE Progressive Democrats have strongly attacked the Government's approach to privatisation, accusing it of being deeply divided on the future of the semi state sector.

PD finance spokesman Mr Michael McDowell said last night the strategic partnership for Telecom Eireann had already fallen apart. He asked just what interest would be served by the State retaining a two thirds interest in Telecom.

He also criticised the Government's handling of the ESB. It was a "foolish decision", he said, to allow the energy buying element of a "competitive" market to be part of the ESB.

Mr McDowell added that a deal had been done politically to guarantee the ESB that it could build the necessary generating capacity to block out private investment.