The Government is expected to consider the sale of Great Southern Hotels following its review of Aer Rianta, which owns the hotel group. Aer Rianta has strongly denied that the chain is on the market at the moment. Its chairman, Mr Noel Hanlon, last night said he was "categorically denying" that the group was being sold.

"Great Southern Hotels is not up for sale, has not been offered for sale and we have not talked to anyone about selling it," he said.

However, the decision on the hotel group's future will rest with the Minister for Public Enterprise, Ms O'Rourke and the Government, as they consider the future strategy for Aer Rianta, and there is understood to be support around the Cabinet table for the disposal of the hotel group. Last month, Ms O'Rourke ordered a review of future development options for Aer Rianta. The options that will be considered by the board include privatisation and flotation of the group.

However, the Government is likely to focus on how to relieve congestion at Dublin Airport and also whether competition should be introduced into the sector; an early move to privatisation is thought unlikely.

The review is expected to be completed within about five months.

Last month in an interview with The Irish Times, Great Southern chief executive, Mr Eamonn McKeon professed to having no problem with the idea the hotel group may leave the state sector. "I remember there was consideration of the group floating in 1988 and you never know something like that may happen again one day," he said at that time.

SIPTU national industry secretary, Mr Noel Dowling has already called speculation about a sell-off of the group premature.

The eight-hotel chain could be expected to raise up to £50 million, while the rest of the group could then be floated on the market.

Profits from the hotel group have been rising as tourist numbers increase, and rose 12 per cent to £2.9 million in 1997.

Earlier this year it completed a new hotel at Dublin Airport at a cost of £9.8 million.