Prime Minister Dominique de Villepin, making the long-anticipated announcement in a joint media conference with EDF chief Pierre Gadonneix, said that 15 percent of the state-run super-utility would be sold off.

Economy Minister Thierry Breton said the shares would be on the market by November 21 and were expected to raise "at least seven billion eurosbillion dollars)."

Gadonneix said the company -- currently loaded with 19.7 billion euros in debt because of aggressive international expansion -- would invest 40 billion euros (48 billion dollars) over five years to boost electricity production, mainly in France.

The move signals a big change in Europe's energy sector. EDF is Europe's largest electricity utility and generates nearly three-quarters of its output from nuclear power plants, of which it has 19 in France.

It is also a major exporter of energy, providing 22 percent of the European Union's needs.

As a state monopoly, it embarked on a deep-pocketed acquisition spree, picking up stakes or businesses in other parts of Europe, as well as in the Americas, Africa and China while private rivals struggled to protect their turf.

Under EU rules opening member states to competition in the sector, it was always on the cards that EDF would have to emerge from the shadow -- and the finances -- of the state.

But France's powerful unions, particularly the hardline General Labour Confederation (CGT) which has a solid base among EDF's 160,000 employees, oppose what they see as rampant capitalism that will threaten jobs, safety at nuclear plants and rates for ordinary consumers.

CGT action last year, in the run-up to the privatisation of the EDF's much smaller sister company Gaz de France, resulted in hundreds of protest blackouts across the country and numerous street demonstrations.

Villepin tried to dampen the labour unrest certain to come after the EDF decision by saying the state would keep "at least 85 percent of the capital" -- somewhat more than the 75-80 percent many had been expecting.

And he stressed that a public service contract signed between the government and EDF would ensure that the utility will respect "three rules" for the public.

Those are: to ensure rates do not soar, to maintain a similar pricing policy across the country and to provide electricity for the poor.

But the CGT was having none of it.

"We will not drop our struggle in the face of what looks like a new attempt by the government to ram through measures, and between now and November 21 we are going to create conditions so that the demands of the workers and citizens are expressed more forcefully," a CGT leader, Jean-Christophe Le Duigou, told journalists.

His union warned it would "widen" its campaign against the privatisation. A petition with 100,000 signatures was to be given to Villepin Tuesday while EDF workers held rallies in front of his and other regional government offices, it said.

A big Paris demonstration is already scheduled for November 19.

The leader of the opposition Socialist Party, Francois Hollande, called the privatisation decision "an economic mistake and a serious political error."

Yet one of the reasons why the government is pushing ahead the part privatisation is that public finances are under severe strain from high debt, deficits and pressure from the European Union for overspending to be reduced to within eurozone limits.

In an editorial, the left-leaning Liberation newspaper said the scene was now set for a quintessentially French struggle between the government and the unions, or, as it put it, "one of those wars of religion of which the country is so fond."

Le Figaro, sympathetic to Villepin's conservative government, noted that the previous privatisations of Air France and France Telecom had passed reasonably well, despite union anger.

"In fact, privatisations aren't a necessary evil, as is too often thought in France. They are more an opportunity, especially for French groups which have a European stature.

"We hope that is the case for EDF, which is already among the biggest electricity groups in the world."

All rights reserved. � 2005 Agence France-Presse. Sections of the information displayed on this page (dispatches, photographs, logos) are protected by intellectual property rights owned by Agence France-Presse. As a consequence, you may not copy, reproduce, modify, transmit, publish, display or in any way commercially exploit any of the content of this section without the prior written consent of Agence France-Presse.

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