Touring the farm on Wednesday, Minister of Economic Development and Technology Zdravko Počivalšek said that the government would be deciding between two alternatives.

"The alternative advocated by the Economy Ministry is a market upgrade of the Lipizzan horse as a cultural monument that we believe should in the future also produce an economic effect," Počivalšek said.

Under the proposal, Kobilarna Lipica, the public institution managing the stud farm, would be re-merged with Lipica Turizem, the tourism company, into a single enterprise as it had been in the past.

However, such a solution is opposed by Minister of Agriculture, Forestry and Food Dejan Židan. He believes Kobilarna Lipica should stay as it is, while Lipica Turizem should be sold or sent into receivership.

The latter option is not favoured by the employees because both entities are strongly linked and would have it hard to perform the activities they do without each other.

"The state allocates some 2.5 million euros to Kobilarna Lipica a year, while we have a difficult situation at Lipica Turizem that is getting worse by the year," Počivalšek explained the situation.

The minister viewed the finishing of a EUR 5.6m renovation at Lipica, an investment for which 85% of the funds have been secured by the European Regional Development Fund and the rest by the ministry.

The project includes a refurbishment of the manor house, the museum of carriages, the stone house and the restaurant, as well as landscaping, the overhaul of the waste treatment plant, lighting and electricity mains and optical network.

The Slovenia Sovereign Holding as the owner of Lipica Turizem has not yet come up with a vision of development of tourism offerings at the site, with receivership in the air and calls for state aid.