A major split has emerged between the Minister for Finance, Mr McCreevy, and the Minster for Transport, Mr Brennan, over the departure of Aer Rianta managing director, Ms Margaret Sweeney.

A spokesman for Mr Brennan yesterday said the Minister wanted the matter to be examined by the incoming Dublin Airport Authority board, chaired by Mr Gary McGann. But the Department of Finance has said Mr McCreevy had no "difficulty" with the arrangements entered into by the Aer Rianta board.

The board, chaired by Mr Noel Hanlon, last week agreed a package with Ms Sweeney on her departure, but Mr Brennan had refused to give his consent to this arrangement. Yesterday a spokesman said that Mr Brennan wanted the matter to be referred to the incoming Dublin Airport Authority, which comes into being next weekend.

He said the Department's position was that no agreement for any package had been concluded and various legal issues still needed to be resolved.

However, the package, believed to be worth about €750,000, has not been opposed by the Minister for Finance, who is the Government's shareholder in Aer Rianta. His spokesman said yesterday that the board of Aer Rianta had submitted a proposal to him in recent days and he effectively agreed with it.

"The board put a proposition to him and he does not have a difficulty with it," a Department spokesman told The Irish Times yesterday. He said Mr McCreevy, who becomes an EU Commissioner later this week, had no further comment to make.

The situation may be discussed at Wednesday's Cabinet meeting, but with a re-shuffle in the offing it is likely to be overshadowed. Contact between Mr Brennan and Mr McCreevy is also possible.

Government sources said the question of who exercises the ultimate authority of the contracts of chief executives at State-owned companies was a complex one. The usual convention is that chief executive's terms and remuneration rates are agreed with the Minister responsible for the area and these are then officially consented to by the Minister for Finance, who is the ultimate shareholder in each company.

However, in this case, the picture is more clouded because the Department of Transport has long maintained that Ms Sweeney is only an "acting chief executive" ahead of the break-up of Aer Rianta. The Department claim this was made clear in her letter of appointment.

It is not clear whether the arrangements announced on Friday with Ms Sweeney have been completed.

Ms Sweeney, who has refused to comment, has been unhappy for some time with plans to hold a public competition to fill the post of chief executive of the Dublin Airport Authority, which replaces Aer Rianta. Sources have said this would involve Ms Sweeney effectively having to reapply for her job.

Having failed to get "clarification" from the Department of Transport on her position, Aer Rianta chairman Mr Hanlon, along with board members, issued a statement last Friday saying Ms Sweeney had exercised a termination clause in her contract of employment with effect from September 30th, 2004, and terms had been "agreed".

The Department of Transport was surprised when the statement was issued on Friday as contact was still ongoing, said sources.

It was also disclosed last week that one of Aer Rianta's worker directors, Mr Peter Dunne, is taking early retirement. Mr Dunne has been a strong opponent of the break-up of Aer Rianta.