Aer Rianta yesterday claimed the tariffs sanctioned by the aviation regulator Mr Bill Prasifka would leave it with airports of "shanty town" quality.

On the defensive after the regulator's blunt rejection of its £1 billion capital investment programme, the company's chairman Mr Noel Hanlon said it would appeal the decision.

Given the company's head-on clash with the regulator, he had little choice.

Aer Rianta's board and management cannot lightly walk away from the upgrade plan they have championed for the airports at Dublin, Cork and Shannon.

Mr Hanlon is not given to using dull words and his presentation at a briefing yesterday contained references to "lunatic" arguments, "Third World" service-levels, and expenditure on a new airport in the Rwandan capital, Kigali.

He said Aer Rianta was flabbergasted by Mr Prasifka's determination, which ruled that only £272 million of its £998 million was "justified".

On radio yesterday, the Minister for Public Enterprise, Ms O'Rourke described the determination as "full and unfettered".

Mr Hanlon claimed Mr Prasifka had no authority to reduce its capital expenditure and rejected the regulator's assertion that it had not been transparent.

The company provided a list of eight reports supplied to Mr Prasifka's office.

In addition, Mr Hanlon said only Aer Rianta had statutory responsibility to decide which services were appropriate, "in the opinion of the company".

But the effect of Mr Prasifka's determination is that £726 million of the £998 million is not recoverable from aircraft landing fees. It does not block the investment per se.

Mr Hanlon appeared to take the point, suggesting that the company would plough ahead with the investment, even if its appeal failed. When asked how it would fund such expenditure, he said the board had not discussed the alternatives in detail.

He said: "The money is available if needed from sources within the company ... We have large assets in the company - such as the Great Southern Hotels - which we might be forced into selling."

The additional £757 million investment it wanted at Dublin was required to build an internal rail network, to complete extension to the terminal, to realign the road infrastructure, build a new runway, provide car parking and build new "stands" so enable passengers board aircraft.

Mr Hanlon also complained that Mr Prasifka had not sanctioned investment to replace fire tenders after 12 years.

He said the investment deemed recoverable by the regulator was the equivalent of £2.04 per passenger over the five years.

He claimed this was not sustainable. It contrasted with an investment rate of £8.47 at the British Airports Authority sites and £5.75 per passenger at Schiphol airport in Amsterdam, Holland.

Investment in a United Nations-funded airport at Kigali was at a rate of £3.20 per passenger.

Stating that Mr Prasifka had accepted Aer Rianta's traffic projections, Mr Hanlon said it wanted to ensure that dangerous overcrowding last year was not repeated.

Mr Prasifka's position, outlined on Monday, was that the recoverable expenditure covered all safety and compliance projects together with all projects to increase aeronautical and commercial capacity at the airports.

In a statement, Aer Rianta said it had requested numerous meetings with Mr Prasifka and his consultants to explain its capital plans and process. "He refused to meet us."

Responding, Mr Prasifka said the comment was "highly misleading". It was his office that first sought meetings with Aer Rianta on the capital expenditure programme.

Aer Rianta had sought meetings after the deadline for making statutory submissions had closed, but the regulator said he declined to meet the company "to protect the integrity of the process".

Mr Prasifka had been guided in his determination by the opposition of the airlines who use the airport to the investment planned by Aer Rianta. They claimed the company wanted to "gold-plate" the airports.

Aer Rianta's chief executive Mr John Burke said it was common for airlines to disagree with airport companies, adding that it was often the same airlines who would complain if the services were restricted as passenger numbers grew. Airport companies worked to 20-year infrastructure plans. Airlines had short-term perspectives, said Mr Burke.