The European Commission has dismissed Ryanair's claims about the likely outcome of its investigation into its deal at Belgium's Charleroi airport.

Mr Gilles Gantelet, spokesman for the Transport Commissioner Ms Loyola de Palacio, said Ryanair chief executive, Mr Michael O'Leary's claims that the length of the deal may be shorted to five years had no foundation.

"He does not have any idea of what the Commission is going to decide, mainly because the Commission does not have an idea of what it is going to decide. I think it's very dangerous for everyone to have these declarations and strange speculations," he said.

Mr O'Leary vented his spleen yesterday about the Commission's investigation and new legislation designed to confer greater rights for compensation on passengers. He told delegates attending a conference in Brussels that the Commission will change some details to appease other high-fare airlines. He also urged the Commission to expedite its decision on Charleroi, which may now be announced next month.

"The Commission's decision on Charleroi is crucial. It will be our Waterloo and we will win it," he declared. He made it clear that Ryanair would fight any negative ruling. "If it does... we'll be off to every European court in every hill and valley. We will never surrender."

Mr O'Leary said Ryanair would not be "shouldered with stupid legislation" coming out of Brussels that has no effect but to make air travel less competitive.

The Commission is examining whether Ryanair received unfair subsidies from the Walloon regional government when it established its Charleroi hub in 2000.

It also emerged yesterday that budget airline, Virgin Express, which competes with Ryanair in Belgium, has urged the Commission to restore fair competition in the Belgian airline industry. In an open letter to the Transport Commissioner, Virgin Express managing director Mr Neil Burrows said the subsidies paid to Ryanair flew in the face of fair competition. "We can only trust that you and your staff will uphold the principle of fair and free competition and ensure that those who have abused this principle are made to stop," the letter stated.

"Those responsible for providing subsidies to an airline that is clearly not in need of them are acting contrary to the interests of fair competition," he said. "It is imperative, in our view, that the EC takes the necessary prompt corrective action to restore balance to the Belgian aviation industry," he added.

When asked about the Virgin Express letter to the Commission, Mr O'Leary said he felt as though he had been savaged "by a dead sheep". He categorically denied that Ryanair received illegal subsidies from the Belgian public authorities, he lampooned "high-fare" rivals as "rip-off merchants" who were "raping" passengers and hiring lawyers and lobbyists to stymie low-cost competition.

- (Additional reporting Guardian Service).