Proposals for reforming the semi-state sector do not emerge very often from either Government buildings or the trade union movement. Most of the time, the only people prepared to enter a debate about how State-owned companies should be funded and run are well-meaning academics or senior figures from the Competition Authority.

This is understandable. Politicians are wary of saying anything remotely controversial about companies they are supposed to be supervising.

If you suggest radical reform, you tend to be accused of supporting a rigid privatisation agenda (see Séamus Brennan), or if you seek to micro-manage the companies on your watch, you get accused of meddling (see Mary O'Rourke).

The trade unions are not much better, they are usually more concerned with guarding their members jobs and pay to consider the wider issues which affect commercially minded semi-states.

Consequently, the Irish Congress of Trade Unions (Ictu) must be congratulated for circulating a discussion document which does propose far-reaching changes for the semi-state sector. While discussion documents tend to find their way to dusty shelves, ideas from Ictu are taken seriously by Irish governments, particularly administrations led by Bertie Ahern.

The document, A New Governance Structure for State Companies, effectively presents one central idea - transfer the ownership of the semi-states away from the mandarins in the Department of Finance and put it into a new State Holding Company (SHC) where access to capital should not be a problem and political interference should be minimal.

Effectively, a new SHC would control the flow of funding going into State-owned companies (in the shape of capital investment for expansion) and the flow of funds coming out of State-owned companies (in the shape of annual dividends).

Collecting and pooling dividends into this new holding company would be the easy part, although one wonders would big payers of dividends, such as the ESB, be prepared to enter into such a centralised arrangement?

The tougher task would be raising the money for expansion. However, the people behind the Ictu policy believe they have the solution.

According to their document, the SHC would itself set up a more localised State Holding Company Investment Board (SHCIB), which would be able to sell part of the SHC to the private sector - well, private pension funds at least. A stake of 14.9-25 per cent might be sold, suggests the document, but no more.

This would bring in significant cash depending on the size of the stake sold.

The beauty of this is it brings in private funds, but the companies themselves, (whether they be Aer Lingus or ESB) remain in public ownership.

The idea is to get access to private funds but, at the same time, prevent State companies slipping into the private sector by stealth.

Effectively, the SHC would be a barrier or buffer between the private sector and the semi-states.

The main concern, of course, is that the SHC and its local investment vehicle would not be rigorous enough and might agree to fund projects which, on strict commercial grounds, would not expect to attract capital support.

The document makes no bones about this. It says the ultimate decision on investments would rest with the SHC board.

"The main decision maker on additional equity and other major investment decisions such as investment, expansion abroad, purchase of other companies etc, would be the board of the State Holding Company," it says.

Consequently, the composition of the SHC board would be crucial. According to the Ictu document, there would be two Department of Finance nominees, three from the SHCIB and three from the social partners, plus one from private pension fund investors. Seeing as this body would have the key decision making power, Ictu will probably need to spell out further how the balance of power might work.

There are a whole range of other issues (for example would the SHC be allowed to go out and raise debt itself) to be examined further.

Department of Finance officials are unlikely to back the plan - turkeys don't tend to vote for Christmas. However, other Government departments might find the concept of cutting loose their own semi-state companies appealing.

The document emphasises that Government departments would still set broad policy for the semi-states but would not need to worry anymore about complex funding problems, such as the one presented at Aer Lingus right now.

One wonders whether a Government that appears squeamish about permitting private-sector investment at Aer Lingus might take a look at this halfway house proposal?