The European Commission will sanction the State's decision to retain a significant stake in Aer Lingus under a deal agreed with the Government.
Internal market commissioner Charlie McCreevy said yesterday a draft deal negotiated in four meetings with Government officials should be legal under EU law.
The draft agreement means that the Government will need to rely on the support of at least one other shareholder to block the sale of slots at Heathrow airport. Initially, the Government had proposed that its retention of a shareholding of at least 25.1 per cent would enable it to block the sale of any of the lucrative landing slots at Heathrow. But it is understood that officials at the EU's Internal Market division insisted this would be illegal.
"If it had been what was originally proposed by the Government it would have been opposed by us," Mr McCreevy told The Irish Times. "The original plan brought to our attention would not have been cleared. I made this quite clear to the Irish authorities."
Mr McCreevy has been fighting a high-profile battle against the retention of "golden shares" by EU governments in state companies that are privatised in public flotations.
He has argued consistently against governments retaining special shares that give them the right to a decisive vote at a shareholders' meeting to the detriment of other shareholders.
"In the Aer Lingus case, the relevant department were aware of our concerns on this and after a lot of negotiation we reached an accommodation," Mr McCreevy said, on the sidelines of an EU finance ministers meeting in Helsinki.
"If it is reflected in the legislation and the firm's memorandum of association it will be satisfactory to us."
Government officials are understood to have accepted the compromise in the knowledge that the combined shareholding of the trade unions and the Government should be enough to block any move by management to sell the Heathrow slots.
The Government is concerned that if Aer Lingus sold its 21 pairs of slots at Heathrow - which are estimated to be worth €300 million - it might be more difficult for Irish passengers to fly to the airport for connecting flights. Heathrow is Europe's busiest airport by passenger numbers and the most important gateway to the US.
Mr McCreevy said that the draft deal with the Irish authorities did not amount to favouritism.
"I am very Irish as people know, but I treat everyone the same, whether it is Poland, France, Germany or Ireland," he said.
The prospectus for the sale of Aer Lingus is expected to be published tomorrow.
It will outline details of the specific conditions and shareholding votes that are required before Aer Lingus management can choose to sell slots at Heathrow airport.
