EU governments are entitled to hold "golden shares" in companies operating in strategic sectors of the economy such as energy, according to an Advocate General of the European Court of Justice.

Mr Damaso Ruiz-Jarabo's recommendation to the court could have a major bearing on the debate over privatisation of semi-state companies in the Republic.

At the Irish Congress of Trade Unions conference last week, strong reservations against further privatisation of semi-state companies were voiced by several trade union leaders, including the incoming president of ICTU, Senator Joe O'Toole.

Senator O'Toole said strategic factors, as well as social ones, had to be considered in retaining control of bodies such as Aer Rianta or Aer Lingus.

Other speakers expressed concerns about the future of the ESB. They particularly condemned the Government's sale of its 35 per cent "golden share" in Eircom, claiming this left small investors, as well as the State's telecommunications infrastructure, at the mercy of "asset strippers".

The ICTU's new general secretary, Mr Dave Begg, told The Irish Times he would not have proposed an Employee Share Option Trust in Eircom if he had known the Government would sell its "golden share".

Mr Ruiz-Jarabo's opinion, delivered to the court last week, said that it was possible for member-states to impose controls on the ownership of companies in strategic sectors such as energy, so long as this did not discriminate against citizens in other states.

It remains to be seen if the court accepts his opinion, but the recommendations of an advocate general are accepted in 90 per cent of cases.

The European Commission has brought infringement proceedings against Portugal, France and Belgium because it considers limits on the sale of shares in state-controlled firms to be incompatible with Community law.