The Royal Observatories could be privatised and the management of the United Kingdom's overseas telescopes in Hawaii and the Canary Islands should be contracted out, according to a review and as predicted in The THES last week.

Science minister Ian Taylor said the Government and the Particle Physics and Astronomy Research Council fully accepted the conclusions of the prior options review.

The Cambridge-based Royal Greenwich Observatory and the Royal Observatory Edinburgh design and supply instrumentation to the overseas telescopes. Both have close links with local universities and with other institutions.

The prior options review team, led by Ian Halliday of University of Wales Swansea, says business predictions for the observatories created "doubt" about their viability as free-standing centres or as a combined unit. Their continued existence may be possible only if they are "embedded in a larger organisation able to supply cost-effective administrative infrastructure", the report says.

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Privatisation as part of a university or consortium of universities could be "a particularly attractive option".

Another option is restructuring them within the public sector. This, says the review, would mean integrating the observatories within a suitable organisation. An "obvious candidate" is the Council for the Central Laboratory of the Research Councils.

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Paul Williams, chairman and chief executive of CLRC, said: "We do expect to make a proposal."

For the overseas telescopes, the review recommends operation be contracted out through competitive tender but that PPARC should retain ownership.