Up to 35 per cent of Aer Lingus is for sale while the Government will retain a majority holding in the company, the Minister for Public Enterprise, Mrs O'Rourke has confirmed.

As she made the announcement in the Dβil, she faced fierce criticism from the Opposition, who accused her of being involved in a "classic asset-stripping arrangement" if she allowed the partial sale of Aer Lingus and did not provide rescue and restructuring aid.

She was attacked for "failing the country, this House and the Aer Lingus workers". The Government had done a "Pontius Pilate act" and passed the trouble on to the company's workers.

Mrs O'Rourke told the Dβil companies within the One World alliance of partner airlines with Aer Lingus "have been in touch with Aer Lingus in the last number of days. As for the price, this matter is only beginning to be negotiated."

She said the Cabinet decided yesterday to adhere to the Shannon stopover, and she dismissed suggestions there would be matching public funds for any private-sector funding.

There was a call for the Minister to provide the State aid and face the EU Commission in the courts later, but Mrs O'Rourke insisted neither she nor the government were in favour of providing State aid against the EU's decision.

Mr Richard Bruton (FG, Dublin North Central) asked if the Minister was going to "meekly" accept the "distorted EU interpretation" of State aid rules. "This is provision for rescuing and restructuring aid. Is she going to meekly lie down and allow a company which had profits of £60 million just 12 months ago, go into the ground?"

He said the Minister had last week described Aer Lingus as a "strategic national asset". Was she now saying that the only future for this asset "is to sell it in a car boot sale and when it is on its knees, to anyone who will produce a few pounds to keep it going". It would be a "classic asset-stripping arrangement" that has been witnessed in other areas.

The Minister agreed she felt the EU ruling was a "distortion" but the fact remains that it was the European position, and she said the deputy knew the position.

Mr Bruton: "I know the rules backwards. There is an option of rescue and restructuring aid."

Fine Gael's public enterprise spokesman, Mr Jim Higgins, asked what was the asking price for a part ownership. "Is it £150 million, £200 million or £300 million? Is there a guarantee that the bulk of this money in fact will be put towards adequate redundancy payments for those unfortunate 2,026 workers?"

The Minister said there were no words of solace that could "magically make everything all right in Aer Lingus and make the survival plan disappear. There are no such words. The company will close except the survival plan is accepted."