The board of Aer Lingus has rejected a request from Ryanair to hold an Extraordinary General Meeting of shareholders.
Ryanair, which owns 29% of Aer Lingus, had requested the meeting to discuss Aer Lingus's withdrawal of the Shannon-Heathrow service.
In a letter to Ryanair, the Aer Lingus Board said the holding of an EGM would infringe Irish and EU competition law, in view of the European Commission's rejection of Ryanair's proposed takeover of Aer Lingus.
Aer Lingus said it was clear that Ryanair was 'attempting to influence and co-ordinate the strategic conduct of Aer Lingus, its closest competitor'.
Meanwhile, the Fine Gael leader, Enda Kenny, has accused the Government of 'hypocrisy, deceit and downright lies' over its stance on the Aer Lingus decision to move its Heathrow flights from Shannon to Belfast.
He said Taoiseach Bertie Ahern should travel to the mid west to hear the concerns of business leaders in the area.
Speaking on RTÉ Radio's News at One programme, Mr Kenny said business leaders' fears were 'not a local whinge' and that the issue was one of national importance.
Deputy Kenny maintains the airline's decision means slots from Dublin and Cork could also be pulled in the future.
Mr Kenny said the Government should support calls for an EGM of Aer Lingus shareholders to protect the Shannon to Heathrow route.
This evening, Fine Gael said regardless of what Aer Lingus has decided in relation to the Ryanair request, it still believes an EGM should be held and the government should now set about demanding that.
Mr Kenny has claimed the Government said it was keeping a shareholding in Aer Lingus to protect the country's strategic interest and that its actions in relation to the Aer Lingus decision showed it was not prepared to back up its words.
The Fine Gael leader said his party will fight to ensure there will be an ongoing air service between Shannon and Heathrow.
Deputy Kenny is visiting Shannon Airport for a series of meetings with Aer Lingus workers and local lobby groups.
Commenting on the controversy for the first time, Mr Kenny accused some Government ministers of publicly disagreeing with the Aer Lingus decision, whilst in fact, agreeing with it at Government level.
Comments welcomed
The Aer Lingus workers group at the airport and the Atlantic Connectivity Alliance both welcomed the Fine Gael pledge of support for their stand and said the campaign to get Aer Lingus and the Government to reverse the original decision would continue.
Last week 60 Fine Gael TDs, senators and councillors met at Shannon and demanded that the Aer Lingus decision to transfer its Heathrow slots from Shannon to Belfast be reversed.
The Shannon Action Group says it wants Fine Gael to reject the Government approach of trying to solve Shannon's problems by finding another airline to provide flights to Heathrow or some other European hub airport.
The Action Group, which organised a protest march attended by over 5,000 people last week, says jobs and the industrial growth of the mid-west region are at stake and its campaign will be intensified in the coming weeks.
The Minister for Transport, Noel Dempsey, is to meet members of the alliance in Dublin next week.
