Ryanair has described as “manifestly wrong” a decision by the UK’s competition watchdog that it must cut its stake in Aer Lingus to 5 per cent from 29.8 per cent.

The provisional decision by the Competition and Markets Authority (CMA), announced this morning, upholds a previous ruling, directing the airline to offload most of its stake because of competition concerns.

Ryanair had requested the CMA re-examine its original decision in light of the proposed bid for Aer Lingus by British Airways parent IAG, which it claimed negated the original concerns.

It also claimed the period of time that had elapsed since the original decision in 2013 constituted a “material change of circumstances”.

After receiving the request from Ryanair, the CMA invited submissions from interested parties, including Aer Lingus, IAG and the Irish Government.

In a statement today, however, it said it had provisionally decided that there was no material change in circumstances or special reason not to implement the remedies set out previously.

“We have carefully considered submissions from Ryanair and others and taken into account all the relevant circumstances, including the fact that the IAG bid is conditional on receiving an irrevocable commitment from Ryanair,” Simon Polito, chairman of the CMA’s Ryanair-Aer Lingus inquiry group, said.

“Having done so, our provisional view is that neither recent events nor the time that has passed since our final report are reasons not to implement the divestment remedy,” he said.

Ryanair, however, criticised the decision, insisting the reasons for the CMA’s original concerns were now redundant.

“The CMA’s provisional decision on Ryanair’s request for a review of its final report - ordering a divestment of Ryanair’s 29.8 per cent minority stake in Aer Lingus - is manifestly wrong,” spokesman Robin Kiely said.

“Given that the only basis for the CMA’s original divestment ruling was that Ryanair’s minority shareholding was or would prevent other airlines making an offer for Aer Lingus, the recent offers by IAG for Aer Lingus totally disprove and undermine the bogus theories and unsubstantiated evidence on which the CMA’s final report was based.”

In its 2013 report, the CMA queried whether Ryanair’s relatively large shareholding in its rival would deter other airlines from merging with or bidding for Aer Lingus.

“Clearly, IAG’s recent offers prove that the CMA’s findings were wrong, that circumstances have changed, and that the divestment remedy must be revoked in light of this compelling evidence,” Mr Kiely claimed.

Ryanair said it would still petition the UK watchdog ahead of its final decision, which is expected to be delivered next month.

Separately, it said the company’s lawyers were seeking permission to appeal the CMA’s final report to the UK supreme court.

Meanwhile, the Government and IAG are said to remain divided over a key issue in the talks on the possible sale of Aer Lingus despite reports of progress.

IAG is proposing to pay €1.36 billion for Aer Lingus and has been discussing the terms under which the Government would sell the State’s 25.1 per cent stake with senior officials since late February.

Responding to reports on Thursday that a deal is “imminent”, Minister for Transport Paschal Donohoe said he expected the talks to conclude within weeks.