The CSA has had a troubled history

The plan is part of reforms for the Child Support Agency, which Tony Blair says is not properly suited to its job.

Under the plans the private firms would be able to keep a proportion of the debts - totalling £3bn - they collect.

Critics fear families could lose out as the firms make a profit. They say the CSA cannot even make routine decisions.

Last year, the agency's enforcement unit cost more to run than it recovered.

Details of the reforms are still being finalised by ministers and senior officials at the Department of Work and Pensions.

But sources have told BBC Radio Five Live's chief political correspondent John Pienaar the decision to sell-on the massive arrears has been taken "in principle".

The private firms would take a share of the collected debt, with the rest handed on in child support payments.

Revenue role?

Another part of the reforms could see the new Revenue and Customs agency (the merged Inland Revenue and Customs and Excise) take on the task of collecting regular child support payments.

This is being described within government as a "preferred option" - though not finally settled, and still being debated within Whitehall.

CSA PROBLEMS £3.3bn in debt arrears £8m in debts recovered from absent parents in 2004 £12m spent each year on running enforcement unit Your views: Should debt collectors chase absent parents?

But there are worries as Revenue staff are already struggling with problems with the tax credits system.

Under the government plans, the CSA itself, which one Whitehall insider described as a "basket case", would be given the much streamlined role of assessing cases.

'Wrong focus'

The planned reforms failed to impress Michelle Counley, from the National Association for Child Support Action.

She said her group was very worried by the focus on enforcement measures, arguing that decision-making at the CSA was not good enough.

"You cannot increase enforcement processes when you cannot get the basic assessments correct," she said.

Ms Counley said not all the CSA debts were assigned to absent parents and many initial assessments of payments were wrong.

Profit fears

Lib Dem work and pensions spokesman David Laws said he was concerned the reforms plans were "half-baked", saying private firms would want to make a profit.

"Is that profit going to come from the money that would otherwise come to children?" he asked.

Mr Laws said private firms were likely to pursue the easiest cases, so that people who would have received their money in any case would get it with 10% or 15% "lopped off" in profit.

Enforcement measures only affected about one in 100 cases and the focus had to be on assessing and collecting routine child support payments, he argued.

Conservative shadow work and pensions secretary Philip Hammond said there was a "crisis of management and leadership" at the CSA which went beyond debt collection.

"The problem goes right back to the assessment-processing stage, and then it is the management of the casework within the new computer system," he said.