The future of Aer Lingus will again be discussed by the Cabinet next week amid signs that a decision "in principle" will be taken in favour of some form of private investment.
A Government spokeswoman confirmed that a Cabinet sub-committee discussed the matter yesterday morning and the matter would go before the full Cabinet at its next meeting.
A spokesman for the Minister for Transport, Mr Cullen, said everyone was working towards a solution that could win the support of all parties.
The Government refused to say whether any firm decision was reached yesterday. But most political sources agree that a decision "in principle" will be made in favour of private investment for the airline. Corporate advisers may be hired to advise on the practical steps needed to implement the decision.
The last set of consultants commissioned by the Government, Goldman Sachs, were asked to examine the most practical ways to secure new funding for the airline. They were not asked to advise on the logistics of bringing private investment into the company.
Most industry analysts believe there is unlikely to be any private sector investment in the airline until a new management team and chairman have settled in. The current chairman, Mr John Sharman, is due to depart in early January, although he may be asked to stay on longer.
A sub-committee of the Aer Lingus board was recently set up to select a successor to Mr Willie Walsh, who is due to leave some time before next May.
He will be leaving along with chief financial officer Mr Brian Dunne and chief operations officer Mr Seamus Kearney.
The Government has also committed itself to briefing the unions before any firm decision is taken.
A senior source familiar with the discussions said: "A decision in principle is one thing, but actual firm action is another."
Political sources said the Taoiseach, Mr Ahern, remained nervous about the idea of selling equity in the company.
Although there is significant frustration among airline management about the slow pace of progress, the airline's financial performance has remained robust and operating profits in excess of €105 million have been widely predicted for 2004.
