Flotation, privatisation and strategic alliance are among options to be considered for Coillte, the State-owned forestry company, in a consultancy study which will be commissioned by the Minister for Marine and Natural Resources, Dr Woods.

In the new year Dr Woods will appoint a group to carry out the study which is expected to be completed by the autumn. Coillte has welcomed the study and said there was no basis for speculation about its outcome.

A steering group has been set up to facilitate and monitor the study and Coillte's chief executive, Mr Martin Lowery, will be a member.

"As Coillte approaches its 10th year it is timely to take stock of the company and to assess how best to build on the progress it has made in the last decade," said Dr Woods.

Coillte is understood to be anxious to gain more commercial freedom and has previously talked about its desire to expand into overseas markets. The decision by the Tanaiste, Ms Harney, earlier this year to block its acquisition of the Northern Ireland saw-milling company, Balcas, came as a major disappointment.

Coillte said yesterday it had radically changed since 1989 "to meet the present and future commercial needs of the company". Mr Lowery said it was important the study should take account all of the company's stakeholders - shareholders, staff, customers and the communities where it operates.

Coillte made pre-tax profits of £18.1 million last year on turnover of £76.8 million. It is expected profits this year will be below that figure because of increased competition. Losses at Pacific Coillte OSB in Co Kilkenny, in which Coillte has a 35-percent stake, will also have an impact.