Ryanair boss Michael O'Leary is still confident of victory

Ryanair's offer for Aer Lingus has now lapsed but it said it would make a new bid if Brussels approves the deal.

Brussels said the deal would "raise serious competition concerns" for passengers and may push up fares.

Ryanair said fares would fall as a result and accused Brussels of an "inconsistent" approach to the issue.

Still confident

Ryanair boss Michael O'Leary said he was "disappointed" by the decision, which will delay a ruling on the deal until May.

But he added: "Ryanair remains confident that its offer, which is consistent with the Competition Commission's stated policy on airline consolidation, will win EU competition approval."

Brussels said initial measures proposed by Ryanair to counter concerns about the impact of the deal on competition and prices were inadequate.

Aer Lingus says it will co-operate with the Commission in its enquiry

Based on takeover rules, all acceptances of Ryanair's offer received to date become void effective immediately.

Ryanair will need approval by the Takeover Panel to make another offer next year.

Ryanair, which recently increased its stake in Aer Lingus to 25%, defended its bid saying it would lead to lower Aer Lingus fares and fuel surcharges, maintain Aer Lingus as a separate, stand-alone airline and retain its brand.

The Irish government, which holds some 25% of Aer Lingus shares, has stated it would not sell its stake, voicing concerns over the impact such a deal could have on Aer Lingus jobs.

It and other investors have said Ryanair's offer undervalues the firm.