Premier Kathleen Wynne's government is leaving the door open to a majority privatization of Hydro One, even as it moves to reassure the public that the province would hold on to significant control of the company in the event of a sale.

The governing Liberals tried to steer this careful course between the two sides in the fractious privatization debate Tuesday, after The Globe and Mail revealed that Ms. Wynne has been quietly crafting a plan to float equity in the Crown corporation to raise billions for new transit construction.

Energy Minister Bob Chiarelli said the province "will continue to have a significant ownership interest" in Hydro One no matter what it does. But he would not say how large that interest would be, and pointedly refused to rule out selling a majority stake to private investors.

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"There are different permutations and combinations of options," he told reporters after Question Period. "There is no determination that has been made yet in terms of control or extent of control." He vowed that the province will bring in the private sector in some fashion.

Bay Street sources said the government will fetch less cash for Hydro One's shares if it does not give majority control to the private sector. Investors would be wary of putting their money in a company subject to politically motivated decisions, they said.

Government and industry insiders say the province is considering an initial public offering of 10 to 15 per cent, possibly followed by several more sales of equity. The alternative option, first unveiled last fall, is to hive off and sell Hydro One's local distribution networks while keeping transmission in public hands. An advisory council led by former banker Ed Clark is studying both ideas and gauging interest among investors.

The Premier said Tuesday that word of the IPO plan "has gotten into the public realm prematurely" and she has not made a "final decision" on whether to pursue it.

"Whatever we do, we are going to control prices. We are going to make sure that the regulatory regimes that will protect people in this province stay in place," Ms. Wynne said when asked about the plan at an unrelated announcement.

A government insider acknowledged that keeping provincial control would push down Hydro One's value to the private sector, since investors would want more latitude to manage the corporation's labour costs and set electricity rates in order to generate higher profits. But the source said the government must balance the desire to make as much money as possible against other policy concerns.

And private control could be difficult to sell to the public against hard pushback from the NDP and unions.

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New Democratic Leader Andrea Horwath on Tuesday argued that privatization would lead to skyrocketing electricity prices, and that the modest-sounding 10 to 15 per cent IPO would only be the start of a much larger selloff.

"They're going to start at the very tip of a slippery slope and drag Ontario down into an abyss of increased hydro rates and complete privatization of Hydro One," she said. "This is certainly nothing they campaigned on in the election last year."

The Society of Energy Professionals raised the spectre of previous private power arrangements that needlessly cost ratepayers hundreds of millions of dollars: "Whether the gas plants or Samsung deal, we've seen the harm of hasty energy decisions," spokesman Adam Chaleff-Freudenthaler wrote in an e-mail.

It is also an open question whether the Liberals will accept such an option unanimously: one party source said there is opposition to privatization within the party; another, however, said caucus was broadly accepting of the IPO plan at a meeting Tuesday, despite most MPPs having not heard of the idea before it was revealed in The Globe.

With a report from Sean Silcoff in Ottawa