The Minister for Public Enterprise, Ms O'Rourke, will today discuss the crisis at Aer Lingus with her Belgian counterpart, Ms Isabelle Durant.

Sources close to Ms O'Rourke said the meeting with Ms Durant, who is president of the European council of transport ministers, should not be seen as a first step in seeking approval for State aid to Aer Lingus.

The State carrier faces a £70 million (88.9 million) loss this year.

It also faces the prospect of a deficit of £100 million in 2002 after attacks on the US by hijacked planes triggered a slump in ticket sales throughout the industry worldwide.

Ms O'Rourke's spokesman described today's engagement as only a "fact-finding" mission ahead of a meeting of all EU transport ministers in two weeks time.

EUCommission policy is against State aid to airlines.

It only sanctioned a £175 million payment to Aer Lingus from the Government in the mid-1990s on the basis that such aid would not be repeated.

With other state-owned airlines, such as the Belgian carrier Sabena and Swissair, facing grave trading difficulties, the issue will be addressed by the council of ministers in two weeks time.

Ms O'Rourke's meeting comes as Switzerland's two biggest banks, Credit Suisse and UBS, offered to inject up to $625 million (685 million) in a last-ditch effort to prevent the collapse of Swissair.

The intervention comes as evidence mounts that Swissair's increasingly desperate financial plight might force it to ground its fleet within days.

Members of the council of ministers will be conscious also that the US administration is releasing $15 billion to the sector in which thousands have lost their jobs since the attacks on September 11th.

Should the Commission move to sanction such support, Ms O'Rourke has said the Government would "look into" the issue.

It is likely that any state support - in the form of loans or provisions for increased security - would be granted only in return for enhanced "efficiency".

However, no formal position has been adopted by the Cabinet, which received an information memorandum from Ms O'Rourke at its meeting last Tuesday.

Up to 700 temporary staff are being let go by the airline following its decision to cut its schedule by a quarter.

A further 1,200 permanent jobs are at risk too, although the position will not become clear until the company's board ratifies a new business plan at its meeting this month.

Some uncertainty surrounds the cost of a severance programme, which has been estimated by separate sources as between £50 million and £100 million, if not more.

Equally unclear is the matter of who would pay for such a deal.

The airline argues that its losses mean it will not be able to pay, but there is no guarantee that the Government would agree to such support.

With strong unions - who grounded flights in strikes over pay this year - the issue is highly charged politically, particularly in north Co Dublin.

The Government is also aware that a general election must take place before June.

After losing £25 million earlier this year due to foot-and-mouth and slower US business, the airline is understood to have told the Government that it will burn through cash reserves of £185 million in the next five months.

The company has reserves of just over £600 million.

But £350 million has been set aside for payments to aircraft manufacturers and is regarded as "untouchable".

Fuel costs have increased by £20 million this year and wage settlements cost £38 million.