The Minister for Public Enterprise will tell the Cabinet today that part-privatisation could be the price of saving Aer Lingus. The sale of a minority stake in the national carrier, probably to another airline, may be needed to secure EU approval for a rescue package to be discussed by the Government today.

It was unclear last night if the cabinet would approve a funding package or postpone a decision for a week. The meeting is expected to extend the war risk indemnity given by the Government to Irish airlines for another month.

The proposed rescue package will be a mixture of State-backed loans and a cash injection that will ultimately come via a third-party investment. The involvement of a commercial investor may allow the Government to get the plan past Brussels state aid rules, but the Commission is expected to require the new investor to be signed up first.

Aer Lingus needs between £150 million (€190 million) and £200 million to fund a redundancy package and make good a working capital deficit. The Government will maintain a majority stake and will argue that European rules allow it match any third-party investment.

Even if the Commission goes along with the plan, the Government will be hard pressed to sell equity in Aer Lingus for a reasonable price in the current environment, according to banking sources.

"Even if you can find a buyer, how much would they pay?" asked one senior banker yesterday.

The main Aer Lingus unions have held preliminary talks with management - under new chief executive Mr Willie Walsh - on a restructuring plan put forward last Friday. They say that talks cannot really begin until the shape of the Government support package is known as it will dictate redundancy terms.

The unions are opposed to the sale of a stake in the airline, with SIPTU taking a harder stance yesterday than its rival IMPACT.

"Aer Lingus should remain in state ownership," said Mr Owen Reidy, the SIPTU branch secretary at Aer Lingus. "We would argue there are other ways of putting money in. The Government has stood up to Europe over other issues," he said.

SIPTU represents the clerical and catering workers who will bear the brunt of the 2,000 redundancies being sought by Aer Lingus management from the 6,300 permanent staff.

IMPACT, which represents cabin crew and others, was less trenchant in its opposition. "We would not see it as the optimal way of dealing with the issue," said Mr Michael Landers of IMPACT.

But he added that the union would be open to discussing a sale in the context of staff being allowed increase their shareholder in the company from its current 5 per cent.

Staff have sought shareholdings of up to 15 per cent in exchange for concessions on productivity at other State companies. This would limit the shareholding that could be sold to an outside investor to 34 per cent.

British Airways, which has an alliance with Aer Lingus, is seen as the front runner to invest. It said yesterday that it was "talking with a number of airlines, especially our Oneworld partners, to see if there are ways to work more closely in the current exceptional times. Nothing more than that."

The Minister for Public Enterprise, Ms O'Rourke, told RTE television last night that another Oneworld alliance member, the Spanish operator Iberia Airlines, had also expressed and interest in Aer Lingus.

Mr Rod Eddington, the chief executive of BA, has already predicted that only three airline groups will be left in Europe following the current crisis.

He said that BA was already in talks with KLM of Holland and other smaller carriers.