THE decision to run Dublin's proposed Luas system at street level rather than underground could be reconsidered by the incoming Minister for Energy, Transport and Communications, Mr Alan Dukes, business and political sources said last night. The former minister, Mr Michael Lowry, who resigned at the weekend, consistently refused to accept the argument that the trams should run underground in the city centre.

The first hint that Mr Dukes's arrival could herald a change of policy came on RTE radio yesterday. In a general interview about the task ahead, Mr Dukes said there was a series of files which required urgent attention.

"One of the first things I'll have to do when I go into the department is get a full updating and briefing on those, to find out just where we're at and what action needs to be taken - and indeed where there are still options open and what those are."

Pressed by the presenter, Mr Pat Kenny, on the specific question of the Luas, Mr Dukes replied: "That's one of them."

Mr Dukes said he had read the articles in The Irish Times by Dr Garret FitzGerald, in which the former Taoiseach argued forcefully that traffic in Dublin would be reduced to a near constant gridlock unless the trams were sent underground in the city centre.

Mr Dukes said he thought the articles were "reflective", and not in the least academic.

"Clearly that's one of the files that I will need to look at very quickly. I don't know what stage the various procedures are at there, how many decisions have been made that are irreversible and so on. That's something that I'll have to get into very quickly," he continued.

The information officer for the light rail system, Mr Eamon Brady, said last night that he believed the decision to put the Luas above the ground in the centre of Dublin was irreversible.

"It is Government policy that the money coming down from the EU is for an on street light rail. Mr Dukes will be a member of the Government. The decision has already been made," he said.

Asked if CIE and the Luas office would be willing to reexamine the underground option if a new minister asked it to, Mr Brady said he could not respond to hypothetical questions.

Mr Dukes, who was made Minister for Agriculture on his first day in the Dail in July 1981, said he was delighted to be back in the Cabinet. He accepted that he would now have to quit his part time job as a presenter on TnaG.

He seemed to rule out a review of the sale of 20 per cent of Telecom Eireann and the granting of the second mobile telephone licence to ESAT Telecom.

"I must say I thought those were two things that Michael Lowry seemed to have handled with particular skill," he commented.