The owner of the Great Southern Hotels chain will discuss a possible sale of at least some of the properties at a key meeting on Monday.

Directors from the Dublin Airport Authority are scheduled to discuss the deteriorating position of the nine hotels. The chain is running out of cash and directors are increasingly concerned the group could become insolvent if fresh funding is not provided.

It is not clear how much might be needed but the hotels have performed poorly this year. After-tax losses of at least € 3.5 million are expected for 2005. This represents more than 10 per cent of the total profits of the authority.

The chairman of the authority, Gary McGann, has long held the view that the hotels should be sold or at least radically re-structured. However, the political climate may not support such action. The Taoiseach, for instance, is a strong supporter of the chain and holidays regularly in the Parknasilla property in Kerry. A Government source yesterday described the financial position of the hotels as "precarious", but said a plan for a complete sale of the nine properties was unlikely to get political backing.

But there were signs yesterday that a compromise solution was attracting support. Under this plan, the two hotels with the highest losses - the Rosslare property and the Corrib Galway - would be sold and the money used to fund a limited redundancy programme and to upgrade remaining properties.

While this is believed to be supported by some ministers and airport directors, there are others who no longer believe the authority should be in the hotel sector. Yesterday a spokesman refused to comment on Monday's meeting and said it was policy not to comment on board proceedings.

The authority currently values all nine hotels at €100 million but this is regarded by many observers as a conservative estimate. The Galway Corrib site, on the outskirts of the city, is regarded as a prime site with potential for significant redevelopment. The authority is planning to build a new terminal at Dublin Airport and needs extra funding over the next few years.

The ratings agency Standard & Poors is expected shortly to conduct a review of the authority's balance sheet and it may downgrade its rating. This would increase the cost of its extensive borrowings.

The authority's board includes: international aviation expert Colm Barrington; Bill Cullen, chairman and owner of Renault Ireland; Desmond Cummins, member of the national executive of the Small Firms Association; Mary Davis, national director, of Special Olympics Ireland; Sir Michael Hodgkinson, a former chief executive of the British Airports Authority; Marie O'Connor, a partner at PricewaterhouseCoopers and Anthony Spollen, an auditor and director.