Ryanair says its takeover bid for Aer Lingus has lapsed.
The move follows a decision by the European Commission tonight to launch an in depth investigation of the proposed takover.
In a statement tonight, the company said its offer had lapsed with immediate effect, and all acceptances were void.
However, it said that that in the event of Commission clearance following its Phase II review, it intended to make a further offer for Aer Lingus.
The Commission had said the proposed €1.4bn takeover would raise serious competition concerns.
It said the takeover could reduce choice for consumers and increase fares.
The Commission opened a Phase II inquiry, which would give it 90 days to decide if the takeover would significantly impede competition within the European Economic Area.
'My main priority on this case is to make sure that consumers would continue to enjoy a competitive choice of airline services,' said Competition Commissioner Neelie Kroes.
The Commission said the proposed merger could lead to the elimination of competition between the carriers on a large number of routes out of Ireland as well as eliminate competition at Dublin airport.
The EC has been considering the competition aspects of Ryanair's bid since 30 October and was due to give its decision at the end of last month.
The deadline was extended until today because Ryanair proposed a number of remedies to resolve potential competition issues - including giving up some or all of Aer Lingus' Heathrow slots to allow other airlines compete on the Dublin/London route.
Meanwhile, European airlines and governments will meet in Brussels to plan a joint approach to talks with the US government in January on the so-called Open Skies deal.
This is critical to Aer Lingus's plan to expand its US routes.
The meeting will attempt to agree a unified approach to restarting talks with the US on Open Skies, by making more concessions to the Americans, who walked out of the talks two weeks ago.
