CITYJET, the Irish airline set up three years ago, is expected to announce a restructuring package at the end of next week. It is understood that the deal will involve raising around £5 million.

The cash is being raised in Ireland and London, according to sources close to the company. Some industry sources say the airline may have debts approaching £8 million.

However, a source close to Cityjet, said last night that the debts were not quite that high. "There is also the matter of debts and disputed debts,"

said the source.

This is understood to be a reference to money Cityjet owes to London City Airport. It has been speculated that the financier Mr Dermot Desmond, is involved in negotiating the restructuring deal. A spokesman for Mr Desmond refuse to comment last night. However, Cityjet is an important customer for London City Airport which is owned by companies controlled by Mr Desmond.

Aer Lingus's group chief executive, Mr Gary McGann, said last night that Aer Lingus was not interested in investing in the company.

Cityjet operates a service to Brussels and Zurich under contract to Aer Lingus. Mr McGann said the company had no plans for further contracts.

Cityjet was established in 1994 by Mr Pat Byrne, the company's chief executive, and a private placings raised £3 million.