The Royal Opera House itself would be funded directly by government as a receiving house for the two companies.
The three-way split is, according to senior sources, the most likely recommendation to be made by the committee under Sir Richard Eyre looking into the future of opera in London. It will report to Chris Smith, the Secretary of State for Culture, Media and Sport, next May.
The privatisation of the Royal Opera would be a culmination of years of public unease at the large amounts of subsidy it swallows up, and recent unease over management ineptitude. The Royal Ballet, currently enjoying critical acclaim and with much cheaper tickets, will continue to receive Arts Council cash.
The ROH itself could not easily be privatised, since pounds 78m of lottery money has gone into its redevelopment, and the public would need to have a stake in its future.
The English National Opera, meanwhile, would continue as an entirely separate company, either at its present home at the London Coliseum or possibly at the Sadler's Wells building in north London.
If the Government does decide on privatising the Royal Opera and funding the ROH as a receiving house, there will be question marks over the future roles of the boards of the company and the ROH, composed of many of the great and the good of the arts world. There will also be question marks over the roles of ROH chairman, Sir Colin Southgate, and chief executive, Mary Allen. Ms Allen, who was criticised by the Culture Select Committee last year, would be unlikely to want to stay on as chief executive of a receiving house.
The recommendations of the Eyre report will come into force after the completion of the ROH's pounds 214m rebuilding programme in autumn 1999.
The Government's ownership of the ROH would also give it a say in determining ticket prices, something the Labour administration would want, again because of the amount of lottery money in the new house, and because of the party's commitment to "people's opera".
During the past 12 months, the Royal Opera Company was twice forced to take emergency measures to stave off liquidation. It has changed both chairman and chief executive and been the subject of a scathing select committee report. Mr Smith is said to be especially keen on privatisation, and significantly refused to rule it out when he appeared before the select committee last autumn.Reuse content