"ARROGANT" and "successful" are words frequently used about Eddie O'Connor. The first explains the number of enemies he has accumulated the second justifies the reluctance of Bord na Mona to dispense with his services.

After three months of vicious company in fighting, involving leaks to the media and some high quality muck raking, the whole unsavoury mess is now likely to be tossed into the unwilling lap of Michael Lowry. It's a political nightmare for a Fine Gael Minister whose handling of tricky semi state issues is already suspect.

The board of the company and its chairman, Pat Dineen, appear to be incapable of dealing directly and cleanly with the issues raised, or of bringing them to a successful conclusion. A last ditch attempt will be made next Monday. But the betting at Leinster House is that the buck will be passed to the Minister.

The matter at issue is easily stated Dr O'Connor's remuneration package as chief executive of Bord na Mona, including vouched and unvouched expenses, exceeded the guidelines drawn up for the semi state sector. The question arising what disciplinary action, if any, should be taken against the managing director?

There any semblance of simplicity ends. As the months dragged by and investigations into Dr O'Connor's remuneration package continued, the issue was drowned in allegations of personality clashes, dirty tricks, leaked reports, character assassination and efforts to restrict the growth of Bord na Mona.

There were plenty of suspects - both inside and outside Bord na Mona - with an inclination to carve up Dr O'Connor and destroy his career. But the motives were somewhat anaemic. Scores were certainly being settled, but why now, and to what end?

Only when, the Government's plan to privatise Bord na Mona is taken into account do the complicated shenanigans of recent months begin to make some sense.

A great deal of money can sometimes be made when a state company is privatised. There were classic examples of suddenly enriched individuals in Thatcher's Britain. And, here at home, events surrounding the preparation of Irish Sugar for privatisation and its flotation as Greencore, and also the conversion of Irish Life to a public company, raised worrying questions.

The case of Eddie O'Connor deserves more than passing scrutiny. He is a man in a hurry, a businessman who has never underestimated his own worth, even when that value has been arbitrarily set by Government.

He has clashed with Department, secretaries and publicly criticised the dead hand of officialdom. As, for state ownership of commercial assets, he, has declared. I hold the State, in all its manifestations, wholly responsible for the lack of flair, creativity and innovation in Irish business."

Nobody denies that Dr O'Connor has presided over the transformation of Bord na Mona's fortunes. And he has great plans for the future. Last year the company made a profit of £5 million. That hardly makes it, cash rich. But the Government is negotiating a new aid package in Brussels, which will provide Bord na Mona with a cash injection and float it off as a public limited company in 1997.

Eddie O'Connor believes in Bord na Mona. He believes in it so much that early last year he persuaded the new board to sanction the preparation of a Turf Development Bill, which would, privatise the company. The decision was taken on the back of an earlier Government resolution to privatise. But even so, the initiative was regarded as a piece of brass neck.

WITHIN the Department, which controls 10 major commercial semi state companies, the attempt by Bord na Mona to dictate the nature and direction of change went down like a lead balloon. The "permanent government does not appreciate such insubordination.

An aspect of the draft Bill which is said to have drawn particular attention within the Department dealt with the powers and the remuneration package of a new chief executive. Dr O'Connor was, according to reliable sources, not prepared to under value his services.

But then, why should he? A recent opinion poll showed that three quarters of the electorate believe that the chief executive of a commercial state body should be paid the same as his opposite number in the private sector. Such remuneration would, however, upset the traditional pecking order of pay between Ministers, top civil servants and state businessmen.

The financial aspects of Dr O'Connor's draft legislation and the implied presumption that he was going to head the new company sent ripples of unease through the system.

The chief executive of Bord na Mona is an important man. For almost nine years, in association with Brendan Halligan as chairman, he ran the company in an autocratic fashion. It may have been the only way. The company had been haemorrhaging money, sinking deeper into debt, when Dr O'Connor was head hunted from the ESB and put in charge.

The semi state company was transformed in those years, shedding 1,500 workers from a staff of 4,000, introducing direct contract labour, diversifying into new ventures and increasing productivity sevenfold. It was an economic success story.

Bord na Mona was now making money. And who can argue with that? But, many people had been hurt and insulted along the way, and others deeply resented the gung ho approach of management.

Within the Department of Energy and Communications, senior officials were said to be unhappy with Dr O'Connor's buccaneering style. They were annoyed by his conviction that he knew what was best for Bord na Mona. And the demand that the Department should dance to his tune, rather than the other way around, was regarded as impertinent.

But nothing happened at that time. And it was last September before Pat Dineen was appointed as a part time chairman to succeed Brendan Halligan.

That's when things really began to, fizz. The first sigh of Dr O Connor's vulnerability appeared when he was advised that the remuneration arrangements be had made with Mr Halligan would have to be sanctioned by the new chairman, Mr Dineen.

It wasn't as easy as it seemed. Mr Dineen, fresh from his job as executive chairman of Irish Steel, wanted everything regularised and cleared through the board. And the board, which had known nothing about the special arrangement with Mr Halligan, asked what exactly had been agreed.

At about that time, it is said, Mr O'Connor successfully resisted an attempt by Mr Dineen to reduce his financial control of the company through the establishment of a financial sub committee. Relations between himself and the new chairman deteriorated.

On the surface, all was calm. But the leaking in April of interim findings from the Price Waterhouse report on Dr O'Connor's pay and expenses changed all that. Over three years, he was said to have received £141,000 in expenses, of which £39,000 was unvouched.

There was clearly an agenda behind the leak. And its timing was probably designed to influence any decision by the board in relation to the chief executive. When Dr O'Connor protested his innocence of any wrongdoing, the response was to requisition another report from Price Waterhouse; covering his full nine years at the company. The way in which that report was structured and the items selected for attention were deeply damaging.

Its findings, which lumped personal benefits and normal company expenditure together, were also leaked. There was clearly an agenda at work.

But there was no getting away from unvouched expenses totalling £66,000 over nine years. For the chief executive of a major company in the private sector, such expenses might be regarded as run of the mill. But, this was Bord na Mona, and ultimate responsibility lay with the Department of Transport, Energy and Communication and with the Minister, Mr Lowry.

Brendan Halligan was called in to explain what exactly he had agreed, with Dr O'Connor. And, following two hours of discussion with the former chairman at a meeting on Wednesday, Mr Dineen issued a statement saying the board was still "very unhappy with several facets, of the remuneration package". It appeared that public pay guidelines had not been complied with, he said, and this had given rise to "grave public disquiet".

Seamus Brennan spoke caustically about the public silence of Mr Halligan and demanded that he give evidence before a Dail committee. Bertie Ahern asked if Mr Halligan had notified the Department in 1995 that the Government's guidelines on pay and expenses were being applied.

For the first time, the controversy had the makings of an old fashioned, inter party row. Then Mr Lowry replied that, as Minister, Brian Cowen had been assured by Mr Halligan that the guidelines were being kept. Bobby Molloy, as Minister, had also insisted that the pay guidelines be kept, he said. If there was fault, it lay with Mr Halligan, Dr O'Connor or with the board.

ONE of the extraordinary aspects of the affair has been the ability of Mr Lowry an accident prone Minister at the best of times, to stay out of it. There isn't a whisper of ministerial machinations around Leinster House. But there is much gruff political talk about his failure to "sort it out".

Mr Lowry can recognise a poisoned political chalice when he sees it. Especially when it is offered by Fianna Fail. He had desperately hoped the board would deal cleanly with the issue.

After all, if a Minister pardoned Dr O'Connor when he had systematically breached Government guidelines, what message would that send to other state companies? And if he sacked him, would the Minister not appear to be part of a wider conspiracy?

There is also an unspoken belief that the "perks" and expenses at other commercial state companies may exceed Government guidelines from time to time. But nobody wants to delve too deeply into that can of worms, given the low levels of pay in such companies.

There is cross party agreement at Leinster House that Eddie O'Connor has been shabbily treated, his achievements at Bord na Mona undervalued and his reputation damaged by selective media leaks. It's a nasty, messy business. But, so far, no over political agenda has been identified.

Until this week, the political parties stood off it, with local deputies quietly supportive of Dr O Connor. Brian Cowen and Pat Gallagher both feel he has been shabbily treated and condemn the form the attempted character assassination has taken. Bord na Mona is a major employer in the region, and Dr O'Connor's drive and vision helped it enormously.

The whole controversy was damaging to the company. And there was concern that, if Dr O'Connor was removed, his replacement as chief executive would not have the same entrepreneurial flair or commitment to the region.

Mr Cowen saw it as a power struggle between Dr O'Connor and Mr Dineen, with the Department lurking in the background. The board, he said, had not been allowed to resolve the issue in a straightforward and responsible manner. And breaches of confidentiality had hampered its deliberations.

As to motive, the former Minister emphasised that a mistake in EU tendering within the Department had delayed Bord na. Mona's plans for a new peat fired power station in the midlands. And there was a belief, he said, that "the real agenda is about restricting the growth of the company and that destroying Eddie. O'Connor is an important step in that respect".

One admirer of Dr O'Connor admitted: "There are more than enough people around who would enjoy sticking a knife in Eddie's ribs." But the calculated nature of the attack left them cold. Getting rid of a guy was one thing, but damaging his future job prospects was another.

There is unease in Government about the whole affair. And it crosses party lines from Fine Gael to the Labour Party and Democratic Left. Last Tuesday Mr Lowry was told by Ministers to sort the mess out and to do it quickly. The longer it dragged on, the more damage was caused to all concerned.

And what about the privatisation timescale? John Bruton told the Dail on Wednesday that the Government's Turf Development Bill, now in official preparation in the Department of Transport, Energy and Communications, would not be ready for publication until next April or May. On that basis, privatisation is unlikely to take place under this Government.

It so happens, that Dr O'Connor's second five year contract runs out in July 1997. The chief executive has a battle on his hands to survive the time limit of his present contract. And securing a new one may be beyond him. A super efficient, if messy, hatchet job has been done.