Barristers acting for the energy regulator, Mr Tom Reeves, and the national grid company, EirGrid, are expected to meet soon to discuss plans to end a stand-off scheduled to reach the High Court on October 15th.

Mr Reeves is understood to have written to the board of EirGrid on Thursday evening, outlining a number of difficulties he has with EirGrid's latest proposal to finalise the terms of its formal separation from the ESB. It is thought that there is only a 50:50 chance of resolving the matter before it enters court. Legal fees have been estimated to be at least €5 million if the case proceeds.

The affair is seen as something of an embarrassment because State entities rarely turn to the courts to resolve their differences.

Mr Reeves is believed to have said that the joint proposal had the potential to duplicate a number of costs at the ESB and EirGrid,which would ultimately have to be paid by electricity consumers.

For example, EirGrid is understood to have secured the right of its client engineer to examine any work being carried out on the grid by the ESB. Mr Reeves is believed to be concerned that this could pave the way for many client engineers hired by EirGrid being paid to monitor work being carried out by those hired by the ESB.

The separation of EirGrid from the ESB is the subject of a long-running dispute with Mr Reeves. EirGrid's establishment was required to ensure the fair operation of competition in the electricity market. In theory, the ESB could manipulate the national electricity system to disadvantage its competitors if it retained control of the grid.

Mr Reeves intervened last year in EirGrid's discussions with the ESB when they failed to reach accord on an infrastructure agreement to govern the detail of their working relationship. He imposed a direction, which the ESB accepted but EirGrid rejected.

This led to Mr Reeves's action in the High Court and an attempt by EirGrid to seek a judicial review of the case. The EirGrid case was enjoined to that of Mr Reeves.

Only in recent days did EirGrid and the ESB agree a joint proposal to end the impasse. Rumours that that agreement had already fallen apart yesterday were denied by a number of informed individuals.

But Mr Reeves's difficulties with the ESB/EirGrid proposal are seen as significant. Only if he agrees to the plan will it be signed off by the boards at ESB and EirGrid.