Die-hard duty free shoppers have received a stay of execution beyond next June's date for abolishing the market-distorting luxury if they sail on international waters between EU countries.

Ferries plying international waters while travelling to member countries will be able to continue selling excise duty-free drink and tobacco, according to legal advice received by the British ferry company, P&O. Mr Greg Sinfield, a solicitor with Lovell White Durrant, which advises P&O, said that with the abolition of article 28 of European Directive 92-12 next June 30th, there would be no provision for duty free sales in international waters or airspace, outside of the 12-mile zones of member states.

"It appears that, as the law stands at the moment, there is a lacuna, a gap, a hole, because it does not cover international waters in intra-Community journeys," he said. Airline passengers, however, would have little opportunity to take advantage of the window of opportunity because of the speed of travel. On May 19th EU finance ministers rejected an attempt by the Minister for Finance, Mr McCreevy, to reopen the duty free abolition case by seeking a report on the likely jobs fallout caused from July 1st next year.

Mr Flan Clune, a spokesman for Aer Rianta, which operates the duty free shops in Irish airports, said that the loophole highlighted how ridiculous the proposal to abolish duty free was. According to a KPMG study, 1,100 Irish people will lose duty free-related jobs and European airfares would rise by an average of £10. Mr Clune said duty free was a tourist attraction and returns on sales had been underwriting transport costs and airport charges. "We have always said it is totally illogical to do away with it," he said.

A spokesman for Irish Ferries, part of a European group lobbying for the retention of duty free, said responses from governments and the European Commission on the latest twist would have to be awaited. "The news that came out today will have to be looked at and studied," he said.

Irish Ferries is currently examining how it can increase retail sales on its vessels outside of the traditional duty free areas. But support to retain the duty zones is growing. Last month, Mr McCreevy urged lobbyists to take the campaign to the capitals of proponents of the abolition. "It's not over till it's over," he said.