Aer Rianta announced yesterday it would seek damages and costs from Ryanair arising from a legal action by the airline which blocked the authority's multimilion pound redevelopment works at the airport.

The company said it would claim compensation for a 10-day delay in carrying out construction work after the airline won an interim injunction in the High Court to halt the development. The airline has claimed Aer Rianta was favouring Aer Lingus in the allocation of airport facilities.

The announcement follows tentative moves towards a resolution of the dispute on Friday morning when both sides reached a compromise on the siting of Ryanair check-in and baggage handling facilities.

At the time, both said they were "delighted" with the late out-ofcourt settlement and the interim injunction was dropped. But today Ryanair will proceed with its High Court action against Aer Rianta claiming abuse of dominant position and breach of EU competition law.

In a statement issued last night the airline repeated its allegations that Aer Rianta was abusing its position at Dublin Airport. An Aer Rianta spokesman strongly denied the claims.

It is considered unlikely that contractors working on the refurbishment will face penalties.