The senior Aer Lingus executive at the centre of two allegations of sexual harassment may step aside from his position, pending completion of the investigation.

It is understood that the executive in question - who has denied the allegations - is expected back today after the Easter break.

Sources at the airline acknowledged that it may be difficult for him to discharge his duties because of the publicity surrounding the allegations.

The issue is likely to come to a head in the next few weeks, said one well-placed source. Two female members of staff have alleged inappropriate behaviour. One holds a senior position with the State-owned airline.

A board sub-committee has been established to look into the allegations and will report back to Mr Bernie Cahill, the Aer Lingus chairman. The two-person committee may not report for several weeks at the earliest and the matter is unlikely to rest once the subcommittee has reported, conceded Aer Lingus sources.

Both the executive and the staff who have made the allegations have access to the State's industrial relations machinery. There is also a possibility that the issue could end up in the courts.

It would be extremely difficult for the executive to carry out his role under these circumstances, point out Aer Lingus insiders.

The company is currently in the middle of unprecedented industrial unrest and faces a significant revenue shortfall as a result of the foot-and-mouth crisis.

The proposed flotation of the airline this year looks increasingly unlikely. The executive in question would be involved in dealing with all these issues.

The airline is currently following its own internal code for dealing with allegations of sexual harassment.

The Minister for Public Enterprise, Ms O'Rourke, who has responsibility for the airline, has been briefed on the situation. Mr Cahill will inform her of the outcome of the investigation and any measures that he plans to take.