The government hopes to make British Waterways a third sector organisation, but no firm decision will be made until after the Comprehensive Spending Review on 20 October, according to the minister with responsibility for waterways.
In a Commons debate on the future of the organisation, which is currently a public corporation, Richard Benyon, the minister for the natural environment, said: "I believe that moving British Waterways out of government control to civil society has the potential to make a significant and innovative contribution to the long-term sustainability and resilience of the waterways, by providing additional income and greater engagement of all users, volunteers and local communities in waterways management."
He said that if British Waterways, which looks after canals and rivers, were transferred to civil society, it would need to be transferred with all its existing assets.
If the transfer goes through, British Waterways would become the sector’s 13th largest charity by income.
Labour MPs said they supported a commitment to make British Waterways part of the voluntary sector.
Alun Michael, Labour MP for Cardiff South and Penarth and chair of the All-Party Parliamentary Group on the Community and Voluntary Sector, said the Labour government had had plans to create "a national trust for canals", and he hoped the coalition would continue with them.
Tristram Hunt, Labour MP for Stoke-on-Trent Central, said he and other members of his party would support any decision by Benyon to mutualise British Waterways, but he said he feared the Treasury would want to sell its assets to raise cash.
"My worry is that by the time we reach the CSR, his colleagues in the Treasury might have decided that flogging off the property portfolio was too good an opportunity to miss," he said.