The British government is to be questioned about the financial relationship between Ryanair and a publicly owned airport in Northern Ireland, the European Commission said today.
The Irish Government may also be questioned after City of Derry Airport revealed last month that it handed over at least £1.25 million of public money to the carrier during a five-year secret deal.
The agreement struck in 1999 guaranteed Ryanair £250,000 a year from a consortium of four state-funded authorities on both sides of the Border to promote its Derry to London route.
Spokesman for EC Transport Commissioner Jacques Barrot
A range of other taxpayer-subsidised benefits included free landing, navigation, air control, security, baggage and passenger charges.
The EC has forced Ryanair in the past to pay back up to €3 million in subsidies paid to it by the state-owned Charleroi airport in Belgium.
Since then, new guidelines have been introduced by Brussels governing start-up incentives to airlines from regional airports.
Derry City Council - which owns City of Derry Airport - said its deal ended last year when the new regulations were published.
The EC's Directorate General for Energy and Transports said it is writing to the United Kingdom's permanent representation in Brussels to "determine the nature of the relationship" between the airport and Ryanair.
"This exercise is a first step to determine if there are issues of State Aid concern," a spokesman for EC Transport Commissioner Jacques Barrot said.
Derry City Council fought a two-year battle against attempts made through the freedom of information laws to uncover the details of the controversial subvention to Europe's largest low-cost airline.
It eventually released details three days before Christmas after Britain's Information Commissioner and Information Tribunal both ordered the disclosure.
It showed Derry City Council, Donegal County Council in the Republic, and the state tourist boards on either side of the Border agreed to foot the bill for Ryanair's marketing costs on the route.
Derry City Council chief executive Anthony McGurk has already admitted the airport was costing ratepayers in the region of £1.3 million a year and that Derry householders pay among the highest rates in Northern Ireland.
Council chiefs spent £14,000 of public money on legal costs keeping the details under wraps since being asked in January 2005 how much Ryanair was paying for use of the ratepayer-funded airport.