The Minister for Finance has told the Dáil that a 'lot of obstacles' remain in the way of a Ryanair takeover of Aer Lingus.
Brian Cowen said the State retained more than 25% of the company's shares, which meant it could not be delisted from the stock exchange, so it would remain a separate company and its operations could not be merged with those of Ryanair.
He said the Government believed a merger between the two airlines would not be in the country's best interests.
Labour leader Pat Rabbitte had asked why the Government sold off a 7% holding in Aer Lingus, which he claimed had facilitated a takeover.
Joe Higgins of the Socialist Party accused the Government of 'allowing the cuckoo to get into the Aer Lingus nest', and claimed that Ryanair would use its shareholding to bargain with the Government on aviation policy.
Earlier, Aer Lingus pilots confirmed that they spent almost €30 million on buying up shares in the airline at a price of €3.04 yesterday.
A statement to the stock exchange said they bought almost 10 million shares, bringing their stake in the airline to just over 2%.
This, combined with the Government's 28% and 12% owned by the Employee Share Ownership Trust, means Government and staff own 42% of Aer Lingus.
Ryanair currently holds 19.2% but cannot buy any more shares without raising its €2.80 per share offer.
