Contacts between IAG and the committee appointed by the Government to advise it on the Aer Lingus bid are due to continue this week, according to official sources. Some progress is believed to have been made in brokering a compromise on the key issue of guarantees over the Heathrow slots, although trade union concerns were again highlighted by a statement from Unite.

It said unions remain “unconvinced” about the merits of the bid from the employee viewpoint and said it appeared some Labour TDs were trying to “soften up public opinion” before the Cabinet decision.

The Government-appointed expert group, comprised of civil servants and advisers, is preparing advice for Minister for Transport Pascal Donohue. The Minister will then bring the issue to Cabinet. However the timing of this is unclear, with Ministers away this week for St Patrick’s Day and Easter approaching shortly afterwards.

IAG chief executive Willie Walsh has said the company would bid on conditions that it got acceptance from the two biggest Aer Lingus shareholders: Ryanair, which owns 29.8 per cent, and the State, which owns 25.1 per cent. If he wants to proceed, he will have to launch a formal bid process under Stock Exchange rules .

Aer Lingus shares rose 2 cent yesterday to €2.35, indicating that investors see a reasonable prospect of a deal being done. They remain 20 cent below the €2.55 which IAG has said it is prepared to offer.

Trade union concern also remains over the bid, with Willie Quigley, Unite regional officer saying he was not aware of any softening in union opposition to the IAG bid.