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Ryanair has hit out at the European Commission over its decision to reject permission for a merger between the budget airline and national Irish carrier Aer Lingus.

The commission has prohibited, "on the basis of the EU Merger Regulation", the proposed takeover by the low-cost airline of Aer Lingus, which would have united Ireland's two biggest airlines.

"The commission concluded that the merger would have harmed consumers by removing this competition and creating a monopoly or a dominant position on 35 routes operated by both parties," a statement said.

"This would have reduced choice and, most likely, led to higher prices for more than 14 million EU passengers using these routes to and from Ireland each year."

Ryanair had argued that other similar mergers had been approved by the commission and has claimed that political bias may have been involved in the decision.

But the commission's competition commissioner Neelie Kroes said the decision was "essential to safeguard Irish consumers, who depend heavily on air transport, and other EU consumers".

"Monopolies are bad for consumers because they reduce choice, lower quality and give rise to higher prices. Low-cost carriers like Ryanair are no exception to this rule," she said.

"Unfortunately, the remedies proposed by Ryanair were not sufficient to remove the competition concerns."

Speaking on the Today programme ahead of the anticipated verdict, Ryanair's head of regulatory affairs Jim Callaghan said: "The commission has overturned 20 years of merger precedent in this case.

"The only reason we can see is that the Irish government and Aer Lingus were implacably opposed to this merger, whereas in previous mergers you have governments supporting the likes of [previous approved mergers involving] Air France KLM, Lufthansa Swiss and Austrian."

Welcoming the decision, the board of Aer Lingus said it was "good news for Aer Lingus and for our customers".

"Consumer choice is at the core of every competitive market and the creation of one dominant player out of Ireland, despite the protestations of Ryanair, just cannot be in the interests of consumers," Aer Lingus chairman John Sharman said.

"Aer Lingus has made tremendous strides over a relatively short time in successfully executing our strategy and that work will continue apace. We are determined to deliver on our excellent prospects as an independent company and I’d like to thank our staff for their continued commitment."

Ryanair announced its offer last October and Aer Lingus advised shareholders to reject it "on the basis that it ignored the company’s excellent prospects as an independent company and that it was anti-competitive".

The low-cost airline owns 25 per cent of its Irish rival.