The ESB and Bord Gáis are to get greater freedom as fully fledged commercial companies after decades as statutory bodies under close government supervision.
The Government is preparing legislation to convert both firms into public limited companies (plcs), which would allow their shares to be sold publicly. Last night the Government denied the move was a stepping stone to privatisation.
At present the ESB is a statutory body governed by legislation from 1927, while Bord Gáis has a similar structure set up under the Gas Act, 1976. The Government has now advertised for consultants to advise it on changing the corporate governance and structure of the firms.
There are two broad types of government-owned companies. The first group is statutory bodies such as the VHI and RTÉ, while the second consists of firms such as Aer Lingus, An Post and the Dublin Airport Authority, which are public limited companies.
Retaining large utilities as statutory bodies is increasingly seen as an anachronism in European business. Many of the large European utilities are now in private hands.
The changes should allow the companies to take strategic decisions without having to look for amendments or fresh legislation.
For example, in 2004 when the ESB wanted to increase its borrowing limit it was necessary for the Minister for Communications to introduce legislation to permit it.
Last night a spokeswoman for the Department of Communications, which currently supervises the firms, said the changes would allow ESB and Bord Gáis "a greater degree of commercial flexibility".
The legislation allowing the changes is not expected to come to the Oireachtas until several other Bills are dealt with.