The revelation comes as An Bord Pleanala delayed its ruling on the terminal . . . which was expected Friday . . .by three weeks, further delaying the project and sparking fears that it may not be completed until 2010.

Guiomard also said the Commission for Aviation Regulation (CAR) believed that the Dublin Airport Authority's passenger forecasts for the new terminal may be wrong.

One of CAR's consultants, Rogerson Reddan, found that the DAA's passenger forecasts for peak periods were inconsistent with its overall forecasts and that a terminal 32-56% smaller could suffice.

"Whether a passenger facility is full or not depends on how big the peak demand is, " said Guiomard. "If you have a very even flow of passengers, you can build a smaller building. The DAA's story is that they believe there'll be what we would consider to be an exceptionally high level of peak demand".

When asked whether the DAA might be attempting to build extra capacity for the future, Guiomard said it was a costly way to accommodate it.

"It's like saying that if the M50 had 30 lanes, there would be no congestion at peak times. However, it would be a very expensive road."

Guiomard said that despite indicating he would increase charges in the future to help the DAA cover the cost of the terminal, his decision did reflect CAR's concerns about the terminal's size. He said he had attempted to shift more of the project's risk onto the DAA by preventing it from claiming one-third of its development expenditure from airport charges until the number of passengers using Dublin Airport hit 33 million.

CAR also introduced a measure whereby the compensation received by the DAA for the depreciation of the terminal would be linked to passenger numbers.

Jim Callaghan, head of regulatory affairs at Ryanair, the most vocal critic of the project, said Guiomard's comments reflected the overly hands-off nature of his approach.

"On the one hand, he finds the thing too large but then, on the other hand, he gives it approval anyway, " he said. A spokesman for the DAA said that the company was confident that its design was the right size.

"Airport terminals are like motorways. They have to be designed to cater for . . . and allow for forecast traffic growth . . . at rush hour, not the average traffic flow during the day, or even the least busy hour of the day, " he said.

Meanwhile, tourism groups and industry bodies have expressed concern about the decision by An Bord Pleanala to delay its decision on the terminal.

"Every month we lose at this end, we lose it at the other end, " said Eamonn McKeon, the chief executive of the Irish Tourist Industry Confederation (ITIC). "We don't want to contemplate the possibility of what summer 2010 will be like without Terminal 2."

An IDA spokesman said it was concerned by the move because "frankly, the kind of investment Ireland is chasing now requires a high quality international airport. There's been times that it's been frustrating for ourselves and our clients . . . it's not been a dealbreaker yet, but we don't want to get to that stage."