The Aer Lingus chief executive, Mr Willie Walsh, and two management colleagues are to leave the company at the end of the month, following controversy over a potential conflict of interest.

Mr Walsh will now leave on January 28th along with chief financial officer Mr Brian Dunne and chief operations officer Mr Seamus Kearney. Originally the three offered to stay until May, but the airline's chairman Mr John Sharman said yesterday this was no longer necessary.

An advertisement will be placed in the national press this week seeking a replacement for Mr Walsh. According to industry sources, once he has left, Mr Walsh is expected to concentrate on a new airline venture and a business plan is expected to be drawn up in February or March.

Mr Walsh said yesterday he was planning to study at least 10 "serious proposals" relating to aviation opportunities. Although before he examines these proposals, he plans to take a short holiday, he said.

He denied there was any conflict of interest over recent weeks and said no formal activity had taken place regarding any future ventures while he was leading Aer Lingus.

Mr Sharman said considerable progress had been made in ensuring a smooth transition to a new management team.

"Following their resignations, upon six months' notice, from the company in November last year, Willie Walsh, Brian Dunne and Seamus Kearney agreed to assist the board, myself as chairman and the company with transition issues."

"The progress made on these issues has been very rapid and accordingly I have now agreed with the resigning executives that they will relinquish their executive responsibilities on 28th January 2005," he said.

He said "considerable interest" had already been shown in the chief executive's post and the board would make the appointment "as soon as possible".

"Aer Lingus is fortunate to have management in depth, experienced and committed staff and a sense of identity second to none."

"With these strengths and the improvement to date in the financial position of the company the significant challenges ahead can be met," he said.

The Minister for Transport, Mr Cullen, said his prime objective remained positioning Aer Lingus for future growth.

However, Fine Gael's transport spokeswoman, Ms Olivia Mitchell, said if Mr Walsh managed to get a new airline venture up and running it could be a body blow to Aer Lingus.

"Willie Walsh's departure from Aer Lingus is a body blow to the company, particularly if he becomes involved in an airline which is competing directly with the State airline," she said.