Government sources remained tightlipped this weekend about the contents of the package other than to say it will be "generous" and "of considerable assistance to selling the airport in the US".

The compensation package was largely agreed at last week's cabinet meeting but will be formally approved by ministers on Tuesday.

Meanwhile, talks are continuing between the Shannon Airport Authority and a number of airlines, including British Midland, in relation to providing a Shannon-London Heathrow route to replace the service controversially withdrawn by Aer Lingus.

Well-placed sources say the government is also working on a 'Plan B' in case the negotiations with airlines do not reach a positive conclusion. There is speculation that the government is still looking closely at the radical possibility of the state buying so-called take-off and landing 'slots' at Heathrow Airport, which could then be used to service Irish airports.

Government sources stressed this week that any route between Shannon and another European hub airport, such as Paris Charles de Gaulle or Amsterdam Schiphol, was being considered as an additional, rather than an alternative, to a new Shannon-Heathrow service.

Any announcement on new services is believed to be a month away but sources said they were "quite optimistic" about a positive outcome overall for Shannon.

Meanwhile, the prospect of strike action by Aer Lingus pilots moved considerably closer this weekend after talks over new terms and conditions for pilots operating from its new Belfast base effectively broke down on Friday.

Aer Lingus has proposed a top rate for a captain operating out of Belfast of �96,520 ( 138,250) plus an average annual bonus �8,300 ( 11,890). The pilots' union, Ialpa, has objected to the new inferior pay levels and wants Dublin pilots to have access to the Belfast jobs on existing terms and conditions.

It is understood that talks between the airline and Impact, which represents cabin crew in Aer Lingus, have also hit problems over conditions for 70 Aer Lingus cabin crew required to operate in Belfast with "significantly inferior" terms on offer, according to an industry source. However, the cabin crew are staying in talks.