Passengers using Cork Airport could see a significant increase in fare prices if the airport authority is saddled with the €160 million debt for the new terminal, according to the Labour party.

Labour TD Kathleen Lynch has described the decision by consultants BDO Simpson Xavier to cut Cork Airport Authority (CAA) out of the mediation process to decide who should foot the bill as "unacceptable".

Speaking following an emergency meeting of the CAA yesterday, Ms Lynch said the dispute as to who was going to pick up the tab for Cork Airport's new terminal was a long way from being resolved.

"If the airport is saddled with the level of debt we think it will be saddled with, the only way they can pay off that debt is increased passenger charges. Increased passenger charges means that the low-cost airlines, which are something we have all become used to, will simply not operate out of Cork Airport."

It is understood the Minister for Transport Martin Cullen has agreed to meet the board of the CAA some time in the coming weeks.

The CAA was promised in 2003 by the minister for transport at the time, Séamus Brennan, that it would take over the airport debt free when Cork, Shannon and Dublin Airports were split up and made independent.