SAO PAULO, Nov 21 (Reuters) - Brazilian power company Copel could be turned into a firm with dispersed ownership and no controlling shareholder by local authorities, a move that would in practice privatize the state-run utility, according to a securities filing on Monday.

Shares of the company surged more than 25% after the announcement, making it the top gainer on Brazil's Bovespa stock index, which was near flat.

Companhia Paranaense de Energia, as Copel is formally known, said it received a letter from the recently re-elected Governor Ratinho Junior of the state of Parana, saying his administration would seek to privatize it through a secondary follow-on share offering to raise money for the state's investment needs.

The Southern Brazilian state currently owns nearly 70% of Copel's voting capital, but under the proposed move, would retain at least 10% of its voting capital, the company added.

Parana also plans to hold on to at least 15% of Copel's share capital, with no shareholder able to hold more than 10% of the total voting capital.

The move would mark yet another high-profile privatization in Brazil's power sector after the federal government diluted its stake in Eletrobras, Latin America's largest utility, earlier this year.

Copel has a market capitalization of 19.14 billion reais ($3.58 billion), according to Refinitiv data, with the company's stock up by more than 45% so far this year.

It posted an adjusted net income of 403.4 million reais in the third quarter, down 46.9% year-on-year.

Copel noted in a securities filing that a potential privatization would still require approval from Parana's state legislature, adding that Ratinho said he would propose a bill "in due time" for legislators to vote on the matter.

The head of the leftist Workers Party in the state, Arilson Chiorato, said on social media he would oppose a privatization.

"It's outrageous," he said. "Copel is a public company and belongs to the people of Parana. We cannot accept the dismantling of a company that generates huge profits for our state."

Analysts at JPMorgan, however, said they did not view opposition from the state assembly as a concern given Ratinho's landslide re-election in October.

JPMorgan added that a potential privatization would unlock operational, financial and governance gains for the company.

"Timing remains uncertain, but we believe the potential re-rating of Copel and our very positive view on the outcome should outshine the overhang from the secondary offering in the short term".

Ilan Arbetman, an analyst at Ativa Investimentos, said the proposal was "extremely positive" for Copel's shares and had a strong potential to unlock value for the stock.

Shares of Sanepar, Parana's state-controlled water utility, also jumped 12% on Monday.

Investors had already been envisioning a privatization after the October election results and as Parana requested information "to analyze a potential capital markets transaction aimed at optimizing its investment in the firm..

Copel will hold an investor day on Tuesday at 9 a.m. local time (1200 GMT). ($1 = 5.3496 reais) (Reporting by Gabriel Araujo and Leticia Fucuchima in Sao Paulo Editing by Steven Grattan Emelia Sithole-Matarise and Matthew Lewis)