FREDERICTON - The New Brunswick government changed course on its plan to sell NB Power to Hydro-Quebec on Wednesday as it watered down the proposal after a public outcry and revolt in Premier Shawn Graham's Liberal party appeared to threaten the deal's survival.

Instead of selling almost all of NB Power, the rewritten agreement will see fewer pieces of the Crown utility end up in Hydro-Quebec's hands.

Hydro-Quebec will proceed with the purchase of New Brunswick's hydro-electric facilities and the Point Lepreau nuclear power plant near Saint John for $3.2 billion.

The original $4.75-billion agreement also saw NB Power sell its transmission and distribution systems, which angered other premiers in Atlantic Canada who feared Quebec would have a stranglehold on the energy pipeline to the lucrative market in the northeastern United States.

New Brunswick keeps big chunk

Under the agreement to be finalized by March 31, NB Power would continue to operate as a New Brunswick-owned and operated Crown corporation, employing more than 60 per cent of the utility's current workforce.

The original purchase price of $4.75 billion equalled the amount of NB Power's debt.

Graham says he listened

Premier Shawn Graham says the renegotiated agreement shows his government has listened to the criticism from the public and others in New Brunswick -- including members of his caucus and a cabinet minister -- who opposed the sale of the public utility.

He said the revamped deal still achieves the original objectives of lowering power rates and reducing debt, while maintaining his goal of making the province a so-called energy hub to the northeastern United States.

"We still get the heritage pool of cheaper power, we still have full control of the development of the energy hub," he told a news conference.

"We still sell the assets with major cost risks in the future, and we still eliminate the majority of NB Power's debt."

Satisfies critics

Premier Danny Williams of Newfoundland and Labrador was one of the deal's harshest critics as he raised concerns along with Nova Scotia's Darrell Dexter about the impact it could have on transmission routes for electricity to the U.S.

In a statement, Dexter dropped his objection to the deal, saying the revised agreement addresses his concerns about the transmission and distribution of energy in Atlantic Canada.

"I still have to review the amended agreement in detail, but it appears that the changes ... address the concerns that Nova Scotia had," he said.

"Nova Scotia is not an energy island, it needs strong connections with the rest of Canada, and North America."

Williams indicated on Tuesday that the revised agreement was an improvement, and Dexter said the changes will ensure that Nova Scotia will have access to an "energy corridor" through New Brunswick to the U.S.

"The revised agreement will also help strengthen connections with Newfoundland and Labrador," Dexter said.