The Government has established a high-level sub-committee to examine all issues relating to the proposed management buy-out of Aer Lingus.
The committee consists of the Taoiseach, Mr Ahern; the Tánaiste, Ms Harney; the Minister for Finance, Mr McCreevy; the Minister for Transport, Mr Brennan and the Minister for Arts, Sports and Tourism, Mr O'Donoghue.
They will hold an initial meeting within the next two weeks, and will consider all aspects of the bid to buy the airline.
During today's Cabinet meeting it was agreed that in the interim, senior management at Aer Lingus would be advised to take no further action regarding their request.
It is understood Mr Brennan told the Cabinet meeting today that he favours the principle of allowing top managers at Aer Lingus to develop a bid for the State company. However, he stressed this approach should be allowed only in the context of an open and transparent process in which rival bids would also be considered.
Permission to bid for management buyout has been sought by the airline's chief executive, Mr Willie Walsh, and two of his colleagues, chief financial officer, Mr Brian Dunne and its chief operations officer, Mr Séamus Kearney. A full board meeting of Aer Lingus has been called for Thursday.
A Department of Transport spokeswoman said: "The Government will respond to their request in due course.
"Until then it was decided to ask them not to develop the bid or take it any further."