KIEV, Sept. 26 - The Ukrainian government is working on legislation that paves the way for selling of hundreds of state-owned assets previously considered strategic, a newspaper reported Wednesday.

The legislation seeks to lift a ban on selling coal mines, oil and gas pipelines, grain silos and other assets, Kommersant daily reported, citing a leaked document.

The report comes days after Economy Minister Petro Poroshenko said the government planned to remove about 1,200 enterprises from the list of strategic assets that cannot be privatized. He did not name the assets.

The sell-off could provide extra budget revenues for the cash-strapped former Soviet republic and also harks back to 1990s moves that freed up business and drove development of the European Union's eastern member states.

"Should the new list pass through the Rada (parliament), it might pave the way for a new round of massive privatization in Ukraine," Reuters reported citing a report by VTB Capital on Wednesday.

"Carrying out the process in a transparent and competitive way would provide a significant boost to the state budget in the coming years, and to the overall financial position."

But, since President Viktor Yanukovich's election in early 2010, many privatization auctions have been won by his campaign's main financial backers, industrialists Rinat Akhmetov and Dmytro Firtash.

Companies close to Akhmetov, in particular, have purchased stakes in a number of electric power companies while Firtash's group has won most auctions for regional gas distribution companies.

"...Examples of privatization in Ukraine suggest that such (transparent and competitive) conditions are not always met in a way that maximizes the benefits for the state," VTB Capital said.

"While no detailed list of the enterprises which have been cleared was provided, the companies mentioned might generate varying degrees of demand from both local and international (mostly Russian) business groups."

Kommersant said parliament, which is dominated by Yanukovich's Party of the Regions and its allies, could approve the law before the October 28 election. (rt/ez)