The chief executive of Aer Lingus, Mr Willie Walsh, has said he is no longer seeking to develop an investment proposal for the airline.

He told the Oireachtas Joint Committee on Transport that a management buyout was not on the cards and the secretary-general of the Department of Transport, Ms Julie O'Neill, was informed of this on Monday.

"That should address the issue once and for all," he said. He said the airline's management only ever sought permission to develop an "investment proposal" and he never used the word "MBO".

He said nevertheless he could assure members no work was being done on an MBO plan and the request for permission to develop an "investment proposal" was now withdrawn. "There has been no work done in relation to it," he said.

Earlier in the day, the Taoiseach, Mr Ahern, told the Dáil a management buyout would be "inappropriate" for the airline because of its unique mandate.

Despite the apparent opposition of Mr Ahern to a management buyout, the airline's management yesterday emphasised that access to capital remained a key priority.

Chief financial officer Mr Brian Dunne said about $1 billion would be needed to renew the airline's fleet. He said there did not appear to be a "willingness" on behalf of Government to invest in the airline at this time and having no access to capital was "unusual" in the airline business.

Mr Walsh said the airline was performing strongly in a highly competitive market with more than 90 airlines now serving Ireland. He said the airline was looking at innovative ways to boost its cash position, among them developing plans for its Dublin Airport headquarters.

He said a planning application was being prepared, but the airline would remain in Dublin whatever happened to the existing headquarters.

He said despite the cost-control measures of recent years, the airline's costs remained out of kilter with rivals like Ryanair.

He said several inaccurate rumours had circulated in the press in recent weeks. There was no question of changing the airline's name or dropping its famous shamrock symbol. He said while some changes were being considered on uniforms, no decision had been taken.

Mr Walsh and Mr Dunne were given a hostile reception by some committee members, with Independent TD Séamus Healy calling for Mr Walsh to tender his resignation. He said this was because of a possible conflict of interest, where Mr Walsh appeared to be promoting an MBO proposal while also running the airline on a daily basis.

Mr Walsh strongly refuted this charge and said there had never been a conflict of interest. He said he had never used the term management buyout. He also rejected a charge from Ms Róisín Shorthall that Aer Lingus was making a big mistake by copying some of Ryanair's strategy. She said it seemed to be a case of choosing between "Ryanair One and Two".

Several members expressed alarm at recent reports of Aer Lingus not carrying the remains of deceased Irish citizens. However, Mr Walsh said Aer Lingus was still prepared to offer this service in a sensitive manner and carried 1,200 coffins each year.