Former minister for communications Mr Ray Burke chose not to award radio licences through a competitive tendering procedure despite recommendations by the then minister for finance to do so.
Mr Ray MacSharry, then minister for finance, was concerned for RTE's future finances and favoured a competitive tendering process, the tribunal heard.
In 1987, Mr Burke began introducing legislation to set up national and local radio stations. After receiving a letter from Mr MacSharry advising on a competition, Mr Burke drafted a reply saying he had decided against it.
A competition would favour the "well-heeled", Mr Burke said in the reply.
Yesterday, he added that a competition would have diverted funds by the future licence holder away from the station and into the State.
"It was a question of: do you want all of the money that was available for the development of a service to go just to the State or do you want whatever available capital there is . . . used for the provision of a quality service to the listeners?"
If RTE's advertising revenue was affected by the new radio stations it may have sought an increase in the licence fee, Mr Patrick Hanratty SC, for the tribunal, said.
"The commercial potential of it wasn't my concern. My concern was to provide an alternative to RTE in the news and current affairs area," Mr Burke said.
The tribunal also heard the idea of an advisory committee to recommend who should get the radio licences was rejected in favour of an independent body because of opposition pressure.
Mr Burke denied it was because the minister could have rejected the recommendations of the committee as this would only have happened in extreme cases involving security matters.
