LONDON, FEB. 25 -- Britain's energy minister announced plans today to privatize the electricity industry in England and Wales, a $50 billion sale that will far outshadow previous privatizations undertaken by Prime Minister Margaret Thatcher's government.

Announcing the program to the House of Commons, Energy Minister Cecil Parkinson said it would "create a modern, competitive industry, owned by the public and responsive to the needs of customers and employees."

But the privatization plan is sure to cause the biggest and most bitter controversy since the government began its program of privatizing state industries in 1979.

Labor Party energy spokesman John Prescott branded the sale "a way to get money for the Treasury to pay for tax cuts" rather than provide benefits for the consumer.

Labor says it is particularly concerned about turning Britain's nuclear power industry over to the private sector.

Lord Marshall, head of the board that runs all power stations and the central electricity grid, also expressed regret at the government's decision, and said it would not benefit consumers.

He said that even if power stations were sold off, the grid should remain in government hands to ensure a secure supply of electricity.

Others disputed Labor assertions that the move would bring increased costs to consumers, noting that competition would lower prices. But it also was noted that lower electricity prices were likely to mean increased purchases of cheaper foreign coal. That could have a major effect on another industry that the government still owns -- British Coal -- resulting in further job losses at a time of already high unemployment.

The electricity privatization was forecast by the Conservative Party before general elections held last June. A bill formalizing the plan is expected to be introduced to Parliament in November or December, with the actual sale not expected until 1990.

Copies of the document outlining the plan will be distributed to the industry's 140,000 employees, many of whom the government clearly expects to buy shares in the new electricity companies.

"Our purpose is to give the customer, and the employees, a better deal and a direct stake in the industry," Parkinson said.

The plan calls for the industry to be broken up into three companies. The largest generating company will encompass about 70 percent of existing capacity, including all nuclear power stations.

A smaller company will own the remaining 30 percent, made up solely of coal-fired generating stations. The electricity grid itself will become a third company, owned by existing area electricity boards that will themselves be separately privatized.

The $50 billion price tag the government has put on the industry is more than the total proceeds from all other previous privatizations.

The sale of Rolls-Royce earned nearly $2 billion. British Telecom sold for about $4.5 billion, and British Gas for about $15 million.