A proposal for a terminal at Dublin Airport will be brought to Cabinet shortly by the Minister for Transport, Mr Cullen. It is understood that a parcel of land at the northern end of the airport could become the site for the new development.

The site, known as the northern apron area, is close to the site recommended on previous occasions by Ryanair.

While the site is close to the existing terminal, some hangars and other buildings would have to be knocked down and road access would have to be provided, sources said yesterday. Any new terminal would need to cater for about 10 million passengers a year, the sources said.

Aer Lingus also has a building in the area but the airline has indicated that it would be prepared to vacate the premises once compensation was provided.

If this site is selected, it is likely to anger the businessmen Mr Ulick McEvaddy and Mr Desmond McEvaddy, who are promoting the development of a site on their own lands at the opposite end of the airport.

According to political sources, the Department of Transport has been in contact with the Dublin Airport Authority about various sites in recent weeks. It is also understood the issue of where a terminal might be situated has been discussed by the chairman of the authority, Mr Gary McGann, and Mr Cullen.

Mr Cullen is likely to consult with other stakeholders including the unions. SIPTU, the largest union at the airport, is supporting the idea of a terminal, although it wants its members to become shareholders in any new project.

Mr Cullen is believed to be anxious to progress a proposal, although it is not clear whether the Dublin Airport Authority would have any role in the project, apart from possibly getting rent from the new building.

Speaking in the Dáil this week Mr Cullen said: "I recognise that an early decision is desirable in respect of this matter so that, regardless of how it is provided, adequate terminal capacity will be in place at Dublin Airport when required to meet the growth in passenger traffic.

"I am in the process of finalising proposals which I will bring to Government shortly. My objective in putting proposals to Government will be to ensure the provision and operation of terminal capacity on an efficient and cost-effective basis."

He said there had been "excellent engagement" on this issue in recent weeks. "I fully accept, as does the Government, that a decision needs to be made immediately on the terminal issue."

There has been little political activity on the issue in the past two years. A 2003 report assessed the viability of an independent terminal. During this process, 13 expressions of interest were submitted to the Department.