The Government is to launch a wholesale review of COI Communications, which will consider if it should be sold off or have more of its work contracted out to the private sector.
The move comes as COI calls a statutory review of its creative roster.
Agencies currently sharing the pounds 113 million account include Abbott Mead Vickers BBDO, D'Arcy and St Luke's.
The Cabinet Office will investigate whether an outside media buyer could obtain better value for money from the Government's pounds 113 million advertising budget than COI. Agencies, COI customers in Whitehall departments and COI staff will be consulted during the review.
Government sources said the inquiry was 'routine' and that semi-independent bodies such as COI were reviewed every five years. COI's last review was in the 1996-97 financial year, which led to it being slimmed down.
The new review will start as soon as possible and should be completed early in the new financial year.
Although COI bosses hope the inquiry will not lead to a major shake-up, it will reopen the debate about whether COI's services could be provided by a major media company working with Whitehall departments.
The Government has always maintained that COI brings unrivalled expertise to choosing agencies and winning discounts, but media buyers have argued that they could do the job just as well.
Ian McCartney, the Cabinet Office minister responsible for COI, said the review would study the performance of COI, assess its 'added value', its role in relation to other departments and its funding arrangements.
He said the review would be carried out by the Cabinet Office in close consultation with Carol Fisher, COI's chief executive, and her staff, and under the general direction of a steering group.