Yukoners who rallied against the privatization of Yukon Energy Corp. Monday are demanding answers and assurances from Premier Dennis Fentie after learning the government had been negotiating a private takeover of the public utility.

About 70 Yukon Energy workers and others who attended Monday evening's rally in LePage Park in downtown Whitehorse were told that earlier in the day, the territorial government admitted to Yukon Energy's board that it had been in secret talks to sell the utility to ATCO, the Alberta-based company that owns Yukon Electrical Company Ltd., which distributes electricity across the territory.

Interim board chair Pat Irvine told Yukon Energy staff that on the instructions from the premier, talks of a sale were off and their jobs were safe.

But concerned Yukon Energy employee Janet Patterson, who informed those at the rally about what had happened earlier in the day, said workers want to see such assurances in writing.

"You have to understand that when trust is broken to the point that it has been for us, that it's difficult to get it back," she told the crowd.

Patterson added that at one point, half of Yukon Energy's assets were up for sale for a mere $50 million.

"Basically, ATCO would be getting your energy company for less than 10 cents on the dollar. That's what our government feels we're worth," she said.

'This isn't a banana republic'

Rumours that Fentie was trying to privatize Yukon Energy began swirling this month, after half the utility's board of directors resigned en masse on June 8.

The directors who quit, including ex-chairman Willard Phelps, accused Fentie and his Yukon Party government of interfering in the board's business.

"It amounts to nothing less than what I would call backstabbing. This isn't a banana republic," Phelps, a former Yukon premier himself, said at Monday's rally.

As recently as late last week, Fentie adamantly denied reports that he was trying to privatize the energy corporation.

"There is absolutely no initiative or process to privatize the energy corporation in the Yukon," Fentie told reporters during the western premiers' conference Thursday in Dawson City.

"There never has been, there is not at this time, nor under this government's watch will there be any privatization of our utility."

Phelps blamed MLAs in Fentie's cabinet for not standing up to the premier on the issue of privatization. He is also calling for a public inquiry into the entire situation.

"The whole issue has to do with the dictatorship he's running, with ministerial responsibility for their portfolios, with interference, with obfuscating facts, with basic democratic principles," he said.

"Never did I think that everything that I stood for and believe in would be undermined by what I consider a tin pot dictatorship."