The sale of ČEZ stock would bring the government an estimated 77 billion Kč ($3.4 billion), which it could use to reign in a budget deficit that could be as high as 173 billion Kč.

The sale is expected to start next year.

ČEZ, which controls about 60 percent of the Czech electricity market, is considered a strategic company, and its possible privatization has opponents among energy experts.

Critics say the government should not sell state assests to cope with immediate financial problems.

"Selling such a valuable stake just to patch a hole in the budget would be a waste," said Zdeněk Andrlík, an energy analyst at consulting company Interel.

HVB Bank Chief Economist Pavel Sobíšek said he would only support the sale of ČEZ shares if the money it raised would go toward pension reform.

The sale would reduce the government's stake in ČEZ to 51 percent.

During the past several years, ČEZ has seen significant growth, and this trend is expected to continue.

Andrlík said that, if the stake is sold on the open market, it could be bought by a random investor, which could potentially hurt the company in the future.

An unwanted investor could, for example, hinder ČEZ's expansion plans, he said.

The company's consolidated net profit in the first half of 2006 amounted to 16.4 billion Kč, up more than 25 percent from the same period last year. Sales during the first half of this year reached 77.2 billion Kč, while they were estimated at 60.7 billion Kč during the same period in 2005.

ČEZ acquired power companies in Romania and Bulgaria earlier this summer, and it is seeking to buy other power companies throughout Central and Eastern Europe.

ČEZ's shares fell 1.4 percent to 806 Kč on the morning of Sept. 18 in reaction to the news, and could decline even further, according to analysts.

The government does not need Parliament's approval to sell its stake.