Plans to sell TEAM Aer Lingus hit a serious obstacle last night when the unions at the aircraft maintenance facility instructed their members not to respond to management proposals to buy out service contracts. Despite a multimillion pound offer to buy out the so-called letters of guarantee, the unions claimed they had been bypassed in the negotiations to date and said they would not consider the proposals until next month.

Danish company, FLS, which is offering around £25 million for the troubled facility is seen by Aer Lingus as the best hope of securing the 1,550 jobs. It argues that global consolidation in the highly com petitive industry means TEAM can no longer survive on its own.

"It is an exceptionally good deal," the chief executive of Aer Lingus, Mr Gary McGann, said last night. "FLS is an exceptionally good company with a very good client list and a clear focus on what it is doing."

Mr McGann added that there were a lot of synergies between the two companies. He also said around £25 million worth of work which FLS currently sub-contracts could now be diverted to TEAM.

The package on offer from Aer Lingus provides up to £32,000 to buy out letters of guarantee that around 1,200 TEAM workers hold from Aer Lingus. The deal also allows them to retain some travel concessions with the airline for five years after the sale of TEAM.

Pension rights will be protected and there will be a lump sum to compensate for the pay freezes the workers have accepted since 1994 under the Cahill rescue plan. However, there is no provision to give the workers a pay rise to bring them into line with other Aer Lingus employees.

The political significance of the sale has been greatly increased by the impending Dublin North byelection, which takes place in March. The Minister for Public Enterprise, Ms O'Rourke, who met the unions earlier this month is expected to see them again, if necessary.

After months of speculation about potential suitors, the final confirmation that Aer Lingus had signed heads of agreement with the Danish company came yesterday. Two other potential investors were said to be in the frame - BF Goodrich, the giant US chemicals to aerospace firm and Allied Signals, another US group.

Mr McGann said FLS Aerospace, which is owned by FLS Industries, a publicly-quoted company, had, like TEAM, been through difficult times. However, he said FLS had a longterm commitment to the industry and had invested heavily in it.

But last night the unions expressed surprise at the decision to sell TEAM to FLS.

At a four-hour meeting with management yesterday afternoon, the unions said TEAM's long-term interests would be better served by remaining with Aer Lingus than being sold to a small operator like FLS.

Full details of the final offer from FLS will not be known for some weeks. The company is to carry out due diligence on TEAM. The two are competitors, but they have different client portfolios.

Aer Lingus, which is a customer of TEAM, currently puts £15 million-£20 million worth of aircraft maintenance work through the company each year. Mr McGann said Aer Lingus would continue to have its aircraft overhauled at TEAM. He said the contracts would be negotiated in the normal way at competitive rates.

It is understood the final deal will be quite complex and will not involve a straight £25 million cash payment, but that the elements of it will amount to around this figure.

FLS issued a short statement last night saying it had entered into a non-binding memorandum of understanding with TEAM concerning the purchase of the business and assets of that company. The company said it was its policy to make no further comment on any inquiries about the acquisition or sale of companies.