Up to 60 of the ESB's most senior managers will be informed this morning of a radical restructuring at the highest levels of the State-owned electricity company.

It is thought that about 12 of this group, who answer to the managing directors of the company's three business units and its corporate centre, will be redeployed. This reflects significant internal restructuring as the ESB gears up for competition and internal promotions.

In a further step towards liberalisation of the market, it emerged separately that the Northern Ireland electricity company Viridian had signed a transmission connection agreement with the ESB's national grid division.

It is believed that many in the ESB organisation are unhappy with the proposed changes, which will see some former managers deployed on project work. The restructuring is the latest phase of a reorganisation which has seen the establishment of three business units: Irish Electricity; Engineering & Commercial and International Investments.

The company is also seeking an early retirement and voluntary severance agreement with its trade unions to reduce its general staffing levels by one quarter, to 6,000. Yesterday's agreement will enable Viridian and its joint venture partner, CRH, to feed electricity from its proposed power station at Huntstown in Co Dublin into the national network. The ESB's grid function will be established as an independent entity - known as Eirgrid - later this year.

CRH wants to reduce its 50 per cent stake in the project to 15 per cent, although the period in which it will accept expressions of interest in acquiring the stake does not end for another four weeks.

The connection agreement is significant because Viridian and other groups proposing to build gas-fired power plants must apply to the Commissioner for Electricity Regulation, Mr Tom Reeves, for scarce gas capacity on the Bord Gais network.

Viridian claimed the agreement positioned its project as a leading contender in the allocation, which will be made this summer on a "first to commission" basis, based on project milestones achieved. After the ESB, which is building a gas-fired plant at Ringsend in joint venture with Statoil, Viridian is the only group to secure transmission connection agreement with the national grid.

Many observers believe that other groups which propose building generation plants in the Dublin area will encounter difficulty securing connection agreements with the grid, because its regional capacity is limited.

When asked about the implications of yesterday's agreement for other proposed plants in Dublin, a spokeswoman for the national grid said: "The impact of new generation being added to that area has a knock-down affect on the acceptability of additional generation on the east coast."