The Minister for Transport, Mr Brennan, yesterday appointed the chairmen of the three regional airport boards that will replace Aer Rianta. But the three Aer Rianta directors who refused to resign will keep their jobs.

In a statement, Mr Brennan said he had appointed Smurfit boss Mr Gary McGann as chairman of what will be the Dublin Airport authority. He appointed local industry leader Mr Patrick Shanahan as chair of Shannon and Apple Computer managing director Mr Joe Gantly to head Cork. Aer Rianta chairman Mr Noel Hanlon and board members Ms Freda Hayes and Mr Liam Meade were left on the Aer Rianta board, despite Mr Brennan asking them to resign after he announced his plan to divide up Aer Rianta.

The decision to allow all three to stay upsets his plans to appoint the new airport chairmen as full Aer Rianta board members, effectively helping to oversee its demise. As the board stands, there are just two vacancies.

Mr Brennan still intends to appoint all three as airport authority chairmen. The extra member will be allowed to participate in board meetings but will not have a vote.

A spokesman for the Minister last night denied that his decision to allow Mr Hanlon, Mr Meade and Ms Hayes to remain with Aer Rianta was a climbdown. "He has always said that he is not in the business of sacking people, and they have given him a written commitment that they will support government policy," he said.

After refusing to resign, it is understood Government representatives approached Ms Hayes and Mr Meade offering them places on the new boards of Cork and Shannon respectively if they stepped down from Aer Rianta. Neither agreed to this suggestion.

Last night, Mr Arthur Hall, regional secretary of the Technical, Engineering and Electrical Union, questioned the legality of the Minister's decision. Mr Hall said that, as far as the union was concerned, neither the Air Navigation Act 1968 nor the Ministers and Secretaries Act 1924 gave Mr Brennan power to appoint interim boards. He argued that the Minister had exceeded his powers.

Mr Hall also said the Minister had asked the Aer Rianta unions on July 18th for two weeks to allow all parties to consider the State company's options. "Then he does this," Mr Hall said.

Mr Brennan's spokesman said the Minister intended to continue his dialogue with the unions. His statement also said there would be trade union representation on the new regional boards.

Mr McGann is chief executive of Jefferson Smurfit Group and a former Aer Lingus chief executive. Mr Shanahan is chief executive of Shannon industry alliance, the Atlantic Technology Corridor, and was managing director of Tellabs' Irish operation, which closed last year with the loss of 444 jobs. Mr Gantly is managing director of Apple Computer, which employs 1,200 people in Cork city.