Ryanair will consider selling its stake in Aer Lingus if its latest takeover bid is rejected by European competition regulators.

This could lead to a break up of the former state-owned Irish carrier, Ryanair chief executive Michael O’Leary claimed.

The budget carrier has put forward a series of remedies designed to counter concerns over the proposed €949 million takeover of Aer Lingus – the third attempt to acquire its rival.

The remedies package involves getting other airlines to commit to taking on 35 routes to Europe where the proposed takeover would result in a monopoly.

Speaking at the airline’s annual meeting on Friday, O’Leary said he would have to seriously consider selling Ryanair’s 29.8% stake in Aer Lingus if the remedies were to be rejected by the European Commission.

He said: “If the commission turns down this remedies package, then I think we would have to seriously consider exiting our investment in Aer Lingus, which will without question result in Aer Lingus being broken up.”

O’Leary claimed that a number of un-named financial institutions had shown interest in acquiring the shareholding.

Talks between Ryanair, Brussels and other airlines would continue until the end of October and O’Leary said he was hopeful of a decision on the bid before Christmas.