Fear of an electricity shortage in 2002 was the principal reason the ESB secured gas for a power plant ahead of private-sector rivals.

This was despite the initial view of the commissioner for electricity regulation, Mr Tom Reeves, that another group should be awarded gas to promote competition in the market.

The State-owned company was awarded a supply of gas two days ago in a competition managed by Mr Reeves.

The competition was necessary because gas-fired power plants require large supplies of gas and capacity on Bord Gais's network is limited.

Projects controlled by Viridian and Rolls Royce also secured supplies in the allocation, which was based on Mr Reeves's assessment of which groups would be "first to commission" their plant.

EPower, a group controlled by businessman Denis O'Brien and oil multinational BP Amoco, was unsuccessful in the competition.

According to two informed people, Mr O'Brien's group was ranked ahead of the ESB in Mr Reeves's initial assessment on grounds that its project would foster competition in the newly liberalised market.

It is understood Mr Reeves overruled this in the next phase of the allocation process because Section 4 of the Gas Allocation Act provides that concern about security of supply into the National Grid should take precedence over competition. Mr Reeves's spokesman declined to comment.

The ESB sees the new plant it is developing in a joint venture with Statoil as crucial to its ability to compete with more efficient plants planned by its competitors. Its rivals have disputed this.

The State-owned company has also expressed serious concerns that rising demand could lead the system to break down in 2002.

The new Ringsend plant, worth £200 million (€254 million), would feed power into the National Grid by end of 2001.

It is known that Mr Reeves entered dialogue with the EU Competition Commission when making his allocation.

Besides saying it was disappointed, ePower's response to the setback remains unclear. The group has already challenged Mr Reeves in the High Court once. EPower joined BP Amoco and another group controlled by US businessman Mr Larry Thomas to develop a plant at Mulhuddart, west Dublin, after it was refused planning permission to develop a plant at Navan, Co Meath.

Comments of a senior ESB spokesman were wrongly attributed to an ePower spokesman in yesterday's editions. The error occurred in the editing process.