National Air Traffic Services is understood to be holding a pitch with City agencies for its corporate and financial comms.
The firm has held initial discussions with a number of the City's heaviest hitters and is drawing up a shortlist for the second stage.
The successful agency will handle NATS' overall corporate comms, but it is understood that supporting a future sale or flotation will be a key aspect of the account.
NATS is currently 49 per cent state-owned, but the Government is reported to be readying plans to privatise its stake to raise about £500m via a straight sale or public flotation. The Government, keen to sell state assets to help reduce the budget deficit, could divest its stake entirely or cut it to about 25 per cent and retain a golden share.
The Airline Group - comprising British Airways, easyJet, Lufthansa-owned BMI, Virgin Atlantic, Thomas Cook, TUI Travel and Monarch Airlines - controls 42 per cent of NATS and may also reduce its shareholding.
The remaining nine per cent is held by airport operators and staff.
NATS currently retains Fleishman-Hilliard on a public affairs brief, which is understood not to be under review. There is no incumbent corporate and financial agency.
Industry observers noted that the financial comms brief was a 'clear sign' that the Government was pressing ahead with privatisation plans for NATS.
Fifty-one per cent of NATS was transferred to the private sector in 2001 under a controversial public/private partnership overseen by Tony Blair's Labour government.
Privatisation may become a lucrative revenue generator for the City PR industry in coming years, with other state assets such as the Royal Mint, Royal Mail and the Tote also reported to be in line to transfer to private hands.