The Cabinet will today rule out putting any Exchequer money into Aer Lingus and will back a part-privatisation of the national airline, subject to consultation with the trade unions.
Aer Lingus, which is to lose its chairman, Mr John Sharman, in early January, and its three top executives in May, needs to spend up to €1 billion on a new fleet of aircraft from 2008.
The Cabinet will be briefed by the Minister for Transport, Mr Cullen, on the latest situation, on foot of a meeting of the Cabinet sub-committee last week.
"You are going to see an indication of the Government's position with more clarity regarding the issue of State investment or private investment," Mr Cullen's spokesman said last night.
However, it is less than clear if the Cabinet will agree to the size of the shareholding to be sold, though analysts believe that up to 40 per cent would be necessary.
The Minister would be given sanction to deal with trade unions and other "stakeholders" over the coming few weeks, the spokesman told The Irish Times.
The decision that the Minister will make will ultimately impact on a lot of people - the workers, the customers of the airline. This is a hugely sensitive issue," he went on.
Mr Sharman, the airline's chairman, is due to step down on January 3rd. Just over a month ago, Mr Willie Walsh, the outgoing chief executive, and his management team gave notice that they would be leaving the company in May.
The Cabinet sub-committee on Aer Lingus acknowledged last Thursday that it could not delay a decision on whether the State or private industry should be the ones to invest in the airline.
The sub-committee agreed that the Government had to give some signal of the direction it intended to take before a new chairman and management team could be attracted.
The sub-committee includes the Taoiseach, Mr Ahern; the Tánaiste, Ms Harney; the Minister for Transport, Mr Cullen; the Minister for Finance, Mr Cowen; and the Minister for Arts, Sport and Tourism, Mr O'Donoghue.
Despite rising oil prices, Aer Lingus is financially sound. Profits this year will be more than €105 million.
The management team led by Mr Walsh wants to spend up to €1 billion on a new fleet of aircraft, much of it for new North Atlantic routes.