The Government will announce tomorrow that it has decided in principle to allow private-sector investment in Aer Lingus.
However, highly placed Government sources told The Irish Times last night that decisions on how this should be implemented - for example whether or how much of a stake in the company should be sold off - will not be taken until the new year.
Informed sources said that "good progress" had been made on the issue of the future of Aer Lingus by the Cabinet sub-committee on transport last Thursday and that an announcement of further progress would follow the scheduled Cabinet meeting on Tuesday.
A recommendation from the sub-committee allowing, in principle, for private-sector investment in the State airline is expected to be ratified by the full Cabinet on Tuesday, which is its final meeting before Christmas.
The Government had set itself a deadline of the end of year for deciding on how to meet the future investment needs of Aer Lingus.
The airline will require significant investment to replace its long-haul fleet from around 2008.
A spokesman for the Minister for Transport, Mr Cullen, said that the Government was engaged in a process with the staff, management and unions at Aer Lingus and that there would be consultations with all stake-holders.
There was speculation over the weekend that the Government could commission corporate advisors to recommend on the most practical way of implementing the decision to allow for private-sector investment in the airline.
Goldman Sachs, the consultants that advised the Government in recent months on the most practical way of securing new funding for the company, were not asked to report on the logistics of how private-sector investment should be brought about.
Most industry analysts believe it is unlikely there will be any private-sector investment in the airline until a new management team and chairman have been appointed and have had time to settle in to their new roles.
A sub-committee of the Aer Lingus board was recently established to find a replacement for the airline's chief executive, Mr Willie Walsh, who is due to leave along with chief financial officer, Mr Brian Dunne, and chief operations officer, Mr Séamus Kearney, before next May.
The current chairman of Aer Lingus, Mr John Sharman, is due to leave the company next month.
Unions at the airline are strongly opposed to privatisation.
However, the Tánaiste, Ms Harney, is understood to be in favour of private-sector investment in the company.
The Taoiseach said last month that the Government should not be bounced into a rash decision on the future of Aer Lingus based on the views of "right-wing economists" and other interests.
The airline is currently in a very health state and is expected to record profits of around €105 million for 2004.
