The option, which is bound to be unpopular in the west, is one of a number currently being considered by a high level inter-departmental group set up by the Taoiseach last week to consider future air services to Shannon.

The government has already ruled out the option of declaring the Shannon route as a public service obligation one, which would mean that it would be able to purchase Heathrow slots and subsidise air services between the two airports.

It is understood that although it would be the "perfect" option in the government's eyes, the Shannon route was ineligible for this form of state aid as it was commercially viable, carried more than 100,000 passengers per year and connectivity to other destinations remained good despite the Aer Lingus withdrawal.

Meanwhile, a spokeswoman for the European Commission has told the Sunday Tribune that there is no legal bar on the government exercising its shareholding in whatever way it sees fit. "There aren't any restrictions, " she said.

The government is understood to be concerned that the board would feel compelled to resign in the aftermath of any defeat, which would also endanger the airline's standing with investors.

It is said to be particularly nervous after sources close to Aer Lingus finally confirmed that Ryanair's proposed motions to the EGM, one calling for the scrapping of Dublin to Gatwick services and one calling for the retention of the Heathrow-Shannon route, would only need a straight majority to be passed.

Some industry sources, including institutional investors, had hoped that the matters could have been dealt with as special resolutions, which would require 75%support.

Leading aviation analyst, Neil Glynn from NCB Stockbrokers, said that investors were hoping that the government would abstain or back the board.

"I think it's positive for the financial development of a company that the government treats it as an independent entity. Investors would certainly be very reluctant to put money into a company which puts the interests of a region ahead of profit-making, " he said.

Glynn said that, in financial terms, the real beneficiaries from the uncertainty surrounding the airline was Ryanair, which has not only increased its stake to 29.4% but also increased fares on routes it competes against Aer Lingus on in the run-up to last week's cancelled pilots strike.

Research conducted by Glynn found that, on some routes, fares were as much as six times higher than they had been previously.

"Ryanair have a pretty aggressive strategy in spotting weakness and exploiting it. Their actions in the Italian market is a good example of this where Alitalia is very weak and they have taken advantage of this to increase prices, " he said.

A spokesman for Ryanair said, however, that Glynn's research was "nonsense".

"Our fares have never been lower, " he said.

SCENARIO 1

The most realistic scenario at the moment, according to informed sources, is that the government and Ryanair will both abstain with institutions and Denis O'Brien voting against a motion on preserving the route. The ESOT votes in favour as do the pilots.

Votes for motion: 18.50%
Votes against: 26.71%
Abstaining: 54.79%
Votes needed to carry motion: 22.6%
Result: motion to retain Shannon services defeated

SCENARIO 2

The government votes for the motion and Ryanair abstains. The institutions and O'Brien vote against. The ESOT votes in favour as do the pilots.

Votes for motion: 43.85%
Votes against: 26.71%
Abstaining: 29.44% V
otes needed to carry motion: 35.28%
Result: motion carried

SCENARIO 3

The government decides to back the board and vote against the motion. Ryanair abstains and the institutions and O'Brien vote against. The ESOT votes in favour as do the pilots.

Votes for motion: 18.5%
Votes against:52.07%
Abstaining: 29.44%
Votes needed to carry motion: 35.28%
Result: motion defeated