Tánaiste Mary Harney will resist any proposal to allow the Dublin Airport Authority to build and own a new terminal at Dublin airport.
At today's Cabinet meeting Minister for Transport Martin Cullen is to brief Ministers about proposals for an overhaul of the aviation sector.
Ahead of the meeting it became clear that if a publicly owned and run second terminal is proposed by Mr Cullen, Ms Harney and the Progressive Democrats will resist it.
Mr Cullen may suggest that a new terminal at the airport could be owned by the current authority, although it could be operated by a third party. He will also outline plans for a partial sell-off of Aer Lingus to finance the airline's development.
However, Ms Harney's position and that of her party is that she strongly favours an independently owned and operated terminal at the airport, which is contained in the Programme for Government.
The PDs are also expected to push for the proposals about Aer Lingus to be considered separately to the airport terminal, and not to be linked with any deal on a terminal.
Although the Tánaiste has yet to comment publicly on the proposals her party colleague, and parliamentary party chairman, Senator Tom Morrissey, said his party would be concerned at allowing the current airport authority to own the new terminal.
"While it's still clearly in the realm of speculation, we would have to be convinced of the merits of going this route, as against a strictly independent terminal, because we believe that an independent terminal is the best way to promote and foster competition," he said.
"I don't think [ the second terminal] should in any way be linked to the Aer Lingus issue. I would be concerned if they were being linked as they are two separate issues."
There is mounting speculation that both issues are linked together to obtain the support of airport trade unions, seen by Taoiseach Bertie Ahern as vital if either is to succeed. Yesterday, Mr Cullen denied the proposals were intertwined. "I'm only driven by one issue on this," he said. "It's what's best for Irish aviation, best for the customers, and best for the employees out there. It's quite clear there are good options out there." Speaking to journalists in Dublin yesterday he said his view was "very much that a terminal is needed".
"There's huge opportunities for Aer Lingus as well," he said. "These are all now, in my view, almost ready to be put to Government and I think the outcome can be very, very positive for Irish aviation."
He also said the previous position of the Government on an independent terminal was now not the right option.
"As you know there's been radical changes at Dublin airport . . . so I think we have to look at the future in a very different way than, perhaps, we might have looked at it in the past."
Today's Cabinet meeting is also expected to hear about plans to float part of Aer Lingus on the stock exchange. The Government is anxious to allow the airline to access funds to purchase new long haul aircraft.
However, president of Siptu Jack O'Connor denied he had done a deal on aviation policy. He said it was wrong to suggest unions were prepared to accept the sale of Aer Lingus in exchange for letting the authority build and operate the new terminal.
The civil aviation branch of Siptu said yesterday they believed a proposal to build a terminal on land owned by Ulick McEvaddy and Desmond McEvaddy was a better option.