The break-up of Aer Rianta into three separate airport companies looks likely, based on a confidential document circulated by the Department of Transport.

The document, written by Mr John Lumsden, head of the Department's aviation section, rules out the more limited option of setting up local executive boards for Shannon and Cork, but maintaining them within the existing Aer Rianta group.

Instead, the document advocates separating the airports from one another and from Aer Rianta. The document says the other option would produce "unworkable corporate governance structures" and "should not be pursued".

Talks are continuing between the Department, the unions and Aer Rianta over the future of the airport authority and none of the parties was prepared to comment yesterday.

The Minister for Transport, Mr Brennan, wants to conclude consultations by April 11th and he is expected to go to Cabinet with his proposals shortly after.

The document strongly supports the break-up idea based on three factors:

l It will create competition among the three airports;

l It will create airport boards and managements who will be focused on their airport and airlines using it;

l It will enable each airport to maximise its potential and to expand its range of services.

To date, Mr Brennan has said he supports Cork and Shannon being given greater autonomy, although he has remained flexible about the precise model for facilitating this.

His Department is also proceeding with proposals for a new terminal at Dublin Airport, although this is being fiercely opposed by Aer Rianta and the unions.

They both claim that a new terminal would remove a large chunk of business from Aer Rianta and possibly place the company's future in doubt.

The document suggests a terminal would achieve several of the Government's policy objectives.

It says it would give airlines a choice between competing terminal operators and would increase competition on price or quality of services.

It says a new era of competition should bring new airlines to Dublin Airport, which would be to the benefit of Irish trade and tourism.