The energy regulator, Mr Tom Reeves, is assessing new proposals to break an impasse between the ESB and the independent national grid operator Eirgrid.

The long-running disagreement is the subject of a High Court action but it is now thought that the ESB and Eirgrid reached agreement in recent days on a model for the final separation of the grid from the ESB.

However, Mr Reeves is believed to have a number of difficulties with the proposed agreement.

In particular, he is said to state that there would be duplication of functions by the ESB and Eirgrid.

This would add to costs, increasing electricity prices.

An action Mr Reeves took against Eirgrid is to be heard in the High Court on October 15th.

This follows Eirgrid's refusal to comply with a direction he issued late last year. While there have been a number of attempts to broker an agreement, all parties are thought to be under considerable pressure from the Government to resolve the matter before it reaches court.

Were such an action to be heard legal fees are believed likely to exceed €5 million.

Only if the ESB/Eirgrid proposal is deemed satisfactory by Mr Reeves will the action be halted.

The grid is being separated from the ESB to ensure the fair operation of the system as competition is introduced in the market.

At the heart of the disagreement between Eirgrid and the ESB were arrangements for detailed planning and procurement.

While the ESB complied with the direction Eirgrid argued it was fundamentally flawed. Eirgrid itself sought a judicial review of the direction but its action was enjoined with the case Mr Reeves took.