The Chairman of CityJet says the Government's rejection of IAG's current offer for Aer Lingus is "gombeen politics at its worst".

The Transport Minister yesterday said the bid as it stands doesn't meet the State's interests - and it's now up to IAG to extend its five-year guarantee on the Heathrow landing slots.

A group of Labour members opposed to the proposed bid will discuss tabling a motion at the party's conference calling on the coalition to rule out selling the airline.

CityJet Chairman Pat Byrne says the Government's handling of the crisis has been "reckless":

Meanwhile, the Finance Minister says a takeover deal for Aer Lingus "certainly isn't off the table".

Speaking to Bloomberg in London, Michael Noonan says those evaluating whether or not to sell the airline to IAG will make their decision on 'commercial grounds' and not political.

Minister Noonan says discussions will continue:

Yesterday, Transport Minister Paschal Donohoe left the door open for a fresh offer to be made with better guarantees on jobs and Heathrow slots.

Mr Donohoe said improved terms and conditions are needed before the bid can be considered.

He said a guarantee from IAG on the future of the Heathrow slots must be extended beyond five years - something the airline group has previously ruled out.

“The five year period that is there at the moment is not enough," he said. "The reason it is not enough is in order for there to be certainty for investment in those areas, not to mention the tourism sector in that area, they need a longer horizon on which they can plan," he added.

"The Government has today confirmed that it will continue to pursue a policy based on competition between at least two airlines with significant home bases in the Irish market," Mr Donohoe said in a statement.

Originally posted at 8.18am