Bord Gais has told the Government its entire share capital should be floated on the stock exchange, it has emerged.

Managers at the company believe it should go to the market as quickly as possible, perhaps within 18 months, but informed sources outside the company have said that may prove ambitious.

A target of two or three years was seen as more realistic.

It has also emerged that Bord Gais's chairman Dr Michael Conlon is likely to step down this year.

His successor will be charged with leading the flotation if the plan is accepted.

Bord Gais is thought to have ruled out a part-flotation or a partial trade sale because both would limit management's control over decision-making.

The timing and scale of a flotation would be for the Government to decide, but it is still unclear when such a proposal would be put to Cabinet.

Informed sources said Government attention in the next two years was likely to focus on Bord Gais's expenditure of more than £500 million (#634.9 million) on major infrastructure projects.

These include a second interconnector parallel with the firm's existing link with Scotland and a ringmain linking Dublin with Cork via Galway and Limerick.

Such projects - and an extension of the gas network to the north-west - have been approved by the Government.

They are crucial to the agenda of the company's chief executive, Mr Gerry Walsh, who succeeded Mr Philip Cronin last year.

Mr Walsh is also believed to favour an expansion into electricity generation, as planned by the company at the Aughinis Alumina plant in Co Clare. These developments will greatly increase Bord Gais's size and revenues. The State company is described as "clean" by those familiar with its structures.

With 750 workers it is relatively small and its policy of sub-contracting large projects means inefficient "restrictive practices" have not developed.

In addition, it does not have significant industrial relations problems similar to those that have stalled plans to float Aer Lingus and privatise the ESB.

The State company was valued by AIB Capital Markets at £830£910 million (#1,054#1,155 million) last July, it is understood.

It is unclear, however, whether that valuation included future revenue streams from the new infrastructure planned by the company. That report was linked to a transformation project agreed with its unions in 1997 in which staff were to receive 5 per cent of Bord Gais.

However, the company is believed to have told the unions in recent months that insufficient progress had been made under that agreement to warrant a 5 per cent transfer.

An employee share option plan (ESOP) has now been linked to the flotation plan.

The company's trade unions are understood to be withholding judgment on the ownership and share-option plans.

As at other State companies, an additional 9.9 per cent of the company may be earned by workers in the ESOP.

While workers are said to be unhappy that no deal has been agreed yet, it is thought that the Department of Public Enterprise and Bord Gais are very keen to avoid industrial unrest at the company.

Informed sources also said a flotation could not proceed until Bord Gais's status was changed to public limited company from statutory company.

Only plcs can be floated and informed sources believe enabling legislation is unlikely to be passed before the general election, whenever it happens. Such legislation is seen as very complex.