The plan, originally announced in June, involves private investors, including NATS employees, taking a 51% stake in the service, with the government retaining a 49% "'golden share".

The government said there would be a period of consultation on the plans which would last until the end of January 1999.

Newspaper reports last month suggested that National Grid planned to offer £500m for the stake.

However, more recently there has been speculation that the sale was to be shelved because of delays in opening a new air traffic control centre at Swanwick in the south of England.

Unions critical

The plan has been heavily criticised by pilots' and controllers' unions which have warned that it could jeopardise safety.

Opponents of the sale say that errors such as last week's "near miss" over Essex will become more likely once profits have to be made from the service.