Bulgaria's prime minister proposed an 8 percent cut to electricity prices on Tuesday and said Czech company CEZ's transmission and distribution licence would be revoked after nationwide protests against rising power prices.
Tens of thousands have demonstrated across Bulgaria, the European Union's poorest company, against high electricity bills and demanded that the government re-nationalise power distributors, just months before an election.
Boiko Borisov said CEZ's licence for power distribution would be revoked but he was against the renationalisation of power distributors, which also include another Czech company, Energo-Pro, and Austria's EVN.
"We may reduce the electricity prices by 8 percent in March if the energy regulator accepts (the proposal)," Borisov told reporters, in his first public comments since protests broke out on Sunday.
"The CEZ licence will be revoked by the end of the day, the three power distributors were fined today."
On Monday the government, whose support is slipping before a July election, sacked Finance Minister Simeon Djankov, who was unpopular for keeping a tight rein on spending, but protests continued regardless.
CEZ shares in Prague extended losses after the news, falling as much as 1.6 percent to a three-week low.
CEZ said it had fulfilled its regulatory duties in Bulgaria, and accused the government of politicising the issue to win votes.
"(We) categorically deny any wrongdoing that could theoretically lead to the starting of a procedure for revoking our license," CEZ spokeswoman Barbora Pulpanova said in a statement.
"At the same time, CEZ does not agree with the politicisation of the issue with a near-term view of parliamentary elections.
(Additional reporting by Angel Krasimirov in Sofia and Jason Hovet in Prague)