ESB directors will decide the fate of its chief executive, Mr Ken O'Hara, at a crucial board meeting next Tuesday. It is understood that certain board members are unhappy with the company's performance.
In a separate development yesterday, the chief executive of CIE, Mr Michael McDonnell, resigned.
The electricity and transport groups are among the largest State-owned companies overseen by the Minister for Public Enterprise, Ms O'Rourke.
ESB board members last month rejected Mr O'Hara's plan to float part of the State power company on the Stock Exchange. That was seen as a significant blow to Mr O'Hara, who championed the flotation option for much of the past year.
Board members are understood to have been canvassed for their views on his handling of the company. This may lead to a vote of no confidence or confidence in Mr O'Hara being tabled at next week's meeting, it is understood. That meeting will be the first chaired by the new chairman at ESB, Mr Tadhg O'Donoghue.
The ESB's trade unions last month criticised its management in a letter outlining their objection, in which they argued the company was not yet ready to float. Such views are understood to be shared by certain board and management members. They are also believed to be unhappy that the ESB has yet to conclude an agreement to reduce its workforce by one quarter, to 6,000 from 8,000.
That is seen as crucial to the company's strategy as it faces competition for the first time - it is thought some directors expected agreement last October.
According to an informed source, the board cannot allow Mr O'Hara's performance to be continuously questioned within and outside the company. There is also unhappiness about the ESB's relationship with Ms O'Rourke's Department, which is not the most amicable. Mr McDonnell was not close to Ms O'Rourke during his time at CIE. He is thought to have secured a lump sum worth about £230,000 and a severance gratuity of £193,000 to leave. The former chief executive is also believed to have dropped a High Court action against CIE Group, in which he sought a salary increase to about £190,000 from about £100,000.
Mr McDonnell has also abandoned a libel action against the Sunday Business Post and his former employer will pay legal fees on the action taken in 1998.
