The controversial request for a management buy-out of Aer Lingus has been withdrawn, it was confirmed tonight, after the airline's chief executive Willie Walsh told the Oireachtas Committee on Transport his management team had no wish to buy the state airline.
"I met with the secretary general at the Department of Transport and advised him that the management team had no interest in pursuing the issue," he said. "That was withdrawn on Monday this week."
He claimed a management buy-out had never been on the cards but it was simply an attempt to develop an investment strategy.
Mr Walsh also confirmed Aer Lingus would not be changing its name and would retain the Shamrock as its symbol.
Earlier, Taoiseach Bertie Ahern told the Dail a management buy-out was not an option and would not be compatible with the mandate of Aer Lingus.
He said under new EU regulations there was no possibility of the State providing significant aid to the airline as it had done in 1993, if the company went into the red.
He was responding to claims by Socialist Party leader Joe Higgins that the proposed buyout represented an "outrageous conflict of interest".
Mr Higgins claimed there was a callous and concerted strategy to undermine the position of Aer Lingus employees who were being "hounded" out of their jobs.
In an angry exchange of words, Mr Higgins asked the Taoiseach why Aer Lingus chiefs had not been sacked for seeking the privatisation of the national airline "so they could buy it themselves and in the process make an obscene financial killing?"
He expressed amazement that the Government apparently saw no problem with watching Aer Lingus executives, charged with protecting a crucial asset of the taxpayer, sitting in their offices and instead plotting to make it their own private property.
The Dublin West TD said in any other circumstances such conflict of interest would be dealt with by instant dismissal.
But Mr Ahern said a management buy-out was not possible. He said there were immense difficulties facing the aviation industry worldwide and that all Mr Walsh and his colleagues were trying to do was to maintain the greatest number of jobs whilst expanding the company.
He accused Mr Higgins of living in "cloud cuckoo land" if he really believed Aer Lingus could stand out against what was happening in the international market.
Trade union Impact welcomed the both the Taoiseach's comments and the news that Aer Lingus management had withdrawn their proposal.
The union, which represents the company's pilots, cabin crew and middle managers, said other issues, such as sustaining jobs, serving customers and maintaining decent pay and conditions, were more important than future ownership arrangements.
Shay Cody, deputy general secretary, said: "We were very concerned about the management buyout proposal as it was a clear conflict of interest.
"But, while Impact has kept an open mind about the future ownership of the company, we remain extremely concerned about management's plans to slash jobs and undermine working conditions at a time when staff have made big sacrifices to bring Aer Lingus into profit.
"We are concentrating our efforts on preventing this and we call on the Government and management to do the same."
Mr Cody said that the Sustaining Progress agreement obliged the Government to actively engage with the trade unions before coming to any final decision over the future ownership of the company.