A Fianna Fail return to power after the general election is likely to lead to a separation of Eircom into two companies.

Dividing the former state company into a network business and a commercial retail operation would pave the way for Eircom’s owners, investment fund Babcock & Brown, to sell off some or all of the retail business.

Fianna Fail has decided to back the break-up of the company.

The party stated last week in its election manifesto that it would ‘‘encourage the separation of Eircom’s network from its commercial business into a separate entity to be regulated by ComReg, on a fully open-access and transparent basis.”

Babcock & Brown is known to favour a full structural separation of the two businesses, which would enable it to sell off the commercial telecoms business while retaining ownership of the network.

A spokesman for Eircom said it was ‘‘an idea worth exploring’’.

But Eircom has already been gearing up for such a move by separating its computer and accounting systems.

Fianna Fail’s commitment to push for a separation does not say whether the two businesses would have the same owner.

However, sources close to ComReg said it would only approve a separation of the company if it involved full structural separation, which means different ownership.

Eircom sources said if it came to separating the businesses, it would seek full structural separation and not just a separation of functions.

Such a move would be controversial because it could enable Babcock & Brown to make a handsome profit by selling its mobile and fixed line customer base while retaining ownership of the network.

It is not clear how much of Eircom’s €4 billion debt would remain with the network company.

However, a split would enable full and open access to Eircom’s network for its competitors, which should lead to greater competition and lower prices.

It could make it easier for the government to roll the €160 million MANS broadband network it built into the new network company.

Referring to a new Eircom network company, the Fianna Fail manifesto said: ‘‘We anticipate that this organisation will attract funding as a quasi-utility and will play a role in encouraging the development of next generation networks in Ireland.”