Talks on the closure of a defunct ESB power station in Co Offaly are believed to be on a knife-edge.

While meetings between managers and trade unions are continuing, it is thought that the ESB made tentative preparations for an emergency board meeting last week at which directors were to be asked to close the plant at Rhode unilaterally.

It is understood directors were told to clear their diaries for a possible meeting on Wednesday, but none was scheduled after an apparent breakdown was averted.

Any decision to lock workers out of the plant could prompt industrial action elsewhere in the company, threatening power supplies, although it is thought that the company is increasingly anxious to close the plant down.

The ESB board moved in January to sanction closure but it has been unable to find a formula to secure staff support to close the power station. The affair is expensive and it is seen as something of an embarrassment in the ESB, which regards itself as a blue-chip State company.

The energy regulator, Mr Tom Reeves, has granted an average increase in the price of electricity of 9.85 per cent from January.

Even though no electricity is being produced, it is understood the ESB is spending some €60,000 per week keeping the plant open. On that basis, the company has spent €2.64 million in the 44 weeks since the start of the year. It spent €1.8 million in the 30 weeks to the end of December last year from the beginning of June.

The situation at Rhode follows the drawn-out closure of another Co Offaly plant, at Ferbane, which remained open without production for two years before its closure in December. The overall cost of that process is understood to have been in the region of €8.89 million.

Up to 100 workers are clocking in every day at Rhode even though no power has been produced since an explosion at the plant in May last year. The workers are receiving shift allowances and they have also received pay increases under national and local ESB agreements.

Workers insist that they should be compensated for stress linked to their exposure to asbestos at the plant. But the company rejects that, stating closure is an industrial relations issue separate to health.

In a recent note to worker representatives, the company said: "Where a staff member has a medically proven physical condition, the company will not drag that person through the courts in seeking to settle the case."

Workers said they would proceed only if the word "physical" was removed from the sentence, reflecting the concentration of staff members on the mental stress they claim due to their exposure to asbestos.

While a small number of staff have contracted non-fatal asbestos-linked conditions, other workers who remain well believe the company has a case to answer because conditions associated with asbestos can lie dormant for years before their discovery.

Accounts of the process differ, with reports of slight progress countered by rumours of breakdown.

At one meeting about 10 days ago, for example, it is thought that certain representatives from the workforce at the plant attempted to walk out of a meeting before returning. A number of meetings were postponed during September while staff at the plant refused to engage with trade union representatives during one of their visits during the summer.

The Rhode plant is one of six in the Midlands which are being closed to make way for two new peat stations at Lanesboro, Co Longford, and Shannonbridge, Co Offaly.