A row has broken out over proposals from ESB to build a new 400 megawatt power station in Co Cork.

The energy regulator, Mr Tom Reeves, in a letter to the Department of Communications, has expressed serious concerns about the plan to build the station in Aghada, Co Cork. He has told the Department that if the ESB goes ahead with the project it could seriously increase the company's dominant position.

The ESB has said the proposals are only at "development stage" and Mr Reeves and the Government have yet to be approached.

Despite this, Mr Reeves has told the Department the ESB's ownership of a large number of existing sites around the State gives it a major advantage over competitors and newcomers to the market.

In the letter, he points out that in Northern Ireland existing sites were taken from Northern Ireland Electricity when the market was deregulated. He has told the Department he has no power to stop the ESB advancing the project. The ESB on several occasions has promised to hold no more than 60 per cent of the electricity market.

However, competitors such as Viridian have called this into question.

"This just simply reinforces the dominant position of the incumbent," said Mr Harry McCracken, managing director of Viridian Power and Energy yesterday.

However a spokesman for ESB said it remained confident that with growth projections for the market, even if the plant went ahead, the company would still be within the 60 per cent market share measure.

Meanwhile Viridian, a quoted energy company, is expected to announce next week that a major new power station is to be built in north Co Dublin.

The stock exchange is expected to be told that the company wants to build a second station at its Huntstown site near Mulhuddart in Dublin. The station could produce over 300 megawatts of power.

The company has declined to comment on the reports, but electricity industry sources said the company was likely to signal its intention to go ahead with the project, possibly in an announcement on Monday.

Through its subsidiary Huntstown Power, the company already owns and operates a 343 megawatt station at the site. It cost €250 million and provides about 5 per cent of the power requirements on the island of Ireland.

It is understood that planning permission is already in place for a second plant at the site and following months of deliberations the board of the company appears finally to have lent its support to the project.