DUBLIN (AP) — Ryanair must sell most of its shares in Irish rival Aer Lingus, Britain's competition authority ruled Thursday, but Europe's dominant budget airline has rejected the ruling and vowed to appeal.

The U.K. Competition and Markets Authority upheld its own April judgment that Ryanair's nearly 30 percent stake in its main Dublin-based competitor restricted Aer Lingus' ability to take decisions. Ryanair became Aer Lingus' largest shareholder as part of three hostile takeover bids following the 2006 privatization of the former state airline.

In Thursday's judgment the lead investigator, Simon Polito, said the recent friendly takeover bid for Aer Lingus by British Airways parent company IAG demonstrates Ryanair's inappropriate influence over Aer Lingus — because IAG won't complete its offer unless Ryanair accepts it.

The ruling said Ryanair must reduce its holding to no more than 5 percent.

While IAG's takeover offer has won support from Aer Lingus' own management and the Irish government, which still holds a 25 percent stake, IAG said the deal won't happen unless Ryanair also agrees to sell at a price that values Aer Lingus at 1.4 billion euros ($1.6 billion).

Polito said regardless of whether IAG's bid is successful, British regulators needed "to ensure that ... Ryanair's ability to hold sway over Aer Lingus is removed."

Ryanair, whose own efforts to acquire Aer Lingus were blocked by the government and both British and European regulators, has declined to say whether it will sell to IAG. Analysts speculate that Ryanair eventually will do a deal with IAG but could play hardball in hopes of winning a more lucrative payout. However, Ryanair is also Europe's most profitable airline and could easily absorb any potential losses from a waiting game it has already played for nearly nine years.

Ryanair Chief Executive Michael O'Leary said his airline would appeal the judgment and other British findings simultaneously to Britain's Competition Appeals Tribunal and to the Supreme Court in London. It lost a similar action in February before Britain's Court of Appeal.

O'Leary said the IAG bid has blown the British regulator's original case "out of the water." He noted IAG needed more than 50 percent of shares to win control, not 70 percent. That means, he said, that a rival takeover bid that British regulators "contended 'could not take place' is now in fact taking place."

Ryanair has questioned why British regulators should play any role in mediating the affairs of two Irish-based airlines. The U.K. authority says Ireland produces Britain's busiest short-haul routes, and Ryanair and Aer Lingus are the two main operators.

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Online: British investigation documents, http://bit.ly/1MKy2zw