Aer Rianta accused the Government of "extreme folly" in relation to plans for the "Pier D" terminal at Dublin airport.

The company rejected demands by a Government working group last November for "low-cost facilities" at its Dublin operation. But, while the stance annoyed senior members of that group, newly released papers disclose continued tension between the Government and Aer Rianta two months after the Cabinet decided in February that Pier D should be built.

Obtained under the Freedom of Information Act, the papers reveal Aer Rianta has spent "a large sum of money" modifying, for security reasons, a separate new pier at the airport. Company sources claimed "a low six-figure sum" was involved. Certain regulations were not in place when the Pier C facility was sanctioned, a spokesman said.

Aer Rianta will submit revised plans for the "low-cost" terminal for approval soon because it says the Pier D scheme already sanctioned is no longer permissible, for security reasons. The Government wants a terminal in time for next summer, so temporary accommodation will be provided while the permanent structure is being built.

Correspondence shows that Aer Rianta chairman Mr Noel Hanlon was told to develop an "urgent response" to a Government decision on February 5th to proceed immediately with Pier D.

The pier had planning permission and the then Minister for Public Enterprise, Ms O'Rourke, asked Mr Hanlon to take "full account" of budget carriers' needs.

But Aer Rianta said in a press statement that Pier D might not be the correct option. This prompted the secretary general of the Department of Public Enterprise, Mr Brendan Tuohy, to write to Mr Hanlon saying he was "somewhat concerned" at the statement's tone.

When the original Pier D was shelved, Ms O'Rourke asked Mr Hanlon on April 18th for an "urgent redesign". She said: "Tendering and preliminary site works should proceed in parallel with the new planning application with a view to completion of the new facility in 2003."

Mr Hanlon, that day, wrote: "It would be an act of extreme folly however for Aer Rianta to proceed in parallel with the new planning application with tendering and preliminary site works. Such a move could cost many millions of euros, which if planning permission were not received would be totally wasted and could result in I, as chairman, having to appear before a Dáil Committee or, even more seriously, a Tribunal."

The disclosure of extra expenditure on Pier C was in a letter Mr Hanlon wrote on February 14th to the secretary general at the Department of Justice, Mr Tim Dalton.

He said: "Considerable difficulty has arisen in the past with the immigration authorities in Dublin airport regarding the construction and layout of the various piers. Indeed, recently Aer Rianta were obliged to spend a large sum of money making modifications to a new pier that has recently been built to comply with the requirements of the immigration authorities.

"You can therefore see that we would not wish to proceed with a building that would not comply with their requirements."

This correspondence ultimately led to the withdrawal of the original "Pier D" plan.