ESB directors meet this afternoon to discuss the Government's failure to sanction its bid for a group of eight power firms in Poland.

The board meeting - described by one source as a "post-mortem" - is the first since a Cabinet sub-committee decided on June 29th to block the proposal, within hours of the deadline for a binding bid.

That intervention was a severe blow to the State firm, which wants to build an international business as competition grows in the domestic market.

The meeting will follow the publication of the firm's annual report, which will include provision of a £236 million (#300 million) restructuring programme, known as PACT, agreed by staff last Friday.

That provision will cover the departure of about 2,000 of the company's 8,000 workers in the next three years. The implementation of that plan, designed to save £100 million each year from 2004, will also be discussed at today's board meeting.

The company will report an operating surplus of about £239 million, down from £266 million last year. This reflects increases in the cost of fuel and comes despite the addition of 57,000 new customers to the network last year.

The surplus before interest and tax was about £165 million and the company paid interest and tax charges of about £134 million.

The retained profit was about £31 million, down from £216 million in 2000. That fall was mostly attributed to the PACT provision.

The sale of the firm's 50 per cent stake in the Internet subsidiary Ocean and a minor shareholding in Renley Engineering yielded a gross of £163 million. The net gain from the sale in January 2000 of its interest in Ocean to its co-owner British Telecom (BT) was about £85 million. That transaction followed BT's acquisition of Esat.

Senior ESB directors are understood to have been very unhappy with the Government's rejection of the Polish plans, which the Taoiseach, Mr Ahern, described in the Dail as "too risky". Expenditure of #1.7 billion was considered likely, almost as great as the ESB's net asset value of #1.8 billion.

The proposal was backed by the Minister for Public Enterprise, Ms O'Rourke, who visited Spain's Basque region yesterday to support plans by the ESB to construct a £300 million power plant in the town of Amorbeita, 15 km from Bilboa.

Ms O'Rourke's spokesman said there was no suggestion that politicians and officials in Bilboa had expressed doubts about the ESB's ability to complete the project. But a source close to the ESB said the matter had been raised by certain figures in the Basque region.

Government approval would be required for expenditure on the plant in Spain, which still requires local regulatory approval. If such approval is secured, it is thought the ESB might go to the Government within six months.