Transport Minister Noel Dempsey is reportedly prepared to support the calling of an extraordinary general meeting of Aer Lingus shareholders to discuss changes made to the contract of chief executive Dermot Mannion.
Ryanair boss Michael O'Leary has requested the EGM to discuss changes made last year that would entitle Mr Mannion to a payment of up to €2.8m if the company is taken over.
The changes were made while Aer Lingus was drawing up plans to shed hundreds of jobs and introduce inferior terms and conditions for remaining workers.
Reports this morning say the minister is "furious" about the development and has refused to attend a farewell dinner for Aer Lingus chairman John Sharman in protest at the move.
The dinner is due to be held later this month at the prestigious Chapter One restaurant in Dublin.