Budget airline Ryanair is to cut 150 jobs at Shannon Airport.

The carrier said it was axing aircraft at the mid-west base after airport bosses refused to renew the airline's five-year deal claiming it had made unreasonable demands.

Ryanair denied the accusation and said it now plans to cut the number of planes from four to one next summer, with the loss of 1.5 million passengers.

The no-frills airline said the Government's 10 euro travel tax per departing passenger and airport charges made Shannon uncompetitive.

Spokesman Michael Cawley said: "All of Ryanair's growth is now taking place outside of Ireland while Irish tourism is being devastated by Government taxes and the high cost Government owned Dublin Airport Authority airport monopoly."

Shannon Airport director Martin Moroney said the airport was keen to secure another agreement with Ryanair but its demands were unrealistic.

The airport said Ryanair also offered to deliver only 600,000 annual passengers, as against the previously agreed two million.

"Services have to be commercially viable for both the airline and for Shannon Airport, but the new terms demanded by Ryanair did not meet those criteria," Mr Moroney said.