A proposal by the State-owned forestry company, Coillte, to take a 80 per cent stake in the Northern Ireland sawmill company, Balcas, would require full cabinet approval. Originally it was thought that Coillte's proposal would only need approval from the Minister for the Marine and Natural Resources, Mr Woods.
But according to a Government source, the proposal involves three Government departments - Enterprise and Employment (and trade), Marine and Natural Resources and the Department of Finance.
Yesterday the formal proposal from the company was submitted to the Department of the Marine and Natural resources.
A decision is not expected to be taken for at least two to three months. Industry sources estimate that the stake is worth approximately £4 million.
Mr Tom Power, assistant-secretary, Department of Marine and Natural Resources, would not comment on how the Cabinet was likely to vote, but said last year's strategic plan, drawn up by the Government for the forestry industry advocated such "vertical integration" proposals. Any proposed expenditure above a £250,000 by Coillte needs approval from the Government.
Meanwhile, the chairman of the Irish Timber Growers Association has called for an immediate meeting with Mr Woods on the issue.
The association represents private growers of timber in the State.
Mr Charles Colthurst, said that while his members "recognise that firms have to achieve scale as part of their competitive strategy in the sawmilling industry, Coillte is in a unique position as the main supplier of sawlog to the industry".
He said this meant "special safeguards must be put in place to ensure transparency and fairness in the market for sawlog".
A Coillte spokesman would not comment yesterday on opposition to the proposal. The Irish Timber Council, which was the first group to publicly oppose the proposal, said yesterday it intended to refer the deal to the Competition Authority, if the Government gives its approval.
Balcas is owned the Duke of Abercorn, has operations in Magherafelt, Enniskillen and in Co Leitrim. Its turnover last year was about £40 million.
