Low-cost Irish airline Ryanair said it was retracting its hostile takeover bid for its national carrier Aer Lingus with immediate effect because of a European Commission probe into the bid.

But the budget carrier said that while all acceptances of its offers were now invalid, it would make a further offer if the European Commission approved the proposed takeover.

Ryanair launched a 2.80-euros-per-share bid on October 5, valuing Aer Lingus at 1.481 billion euros (1.95 billion dollars) days after Aer Lingus was partially floated on the London and Dublin stock exchanges.

Ryanair's chief executive Michael O'Leary said he was disappointed with the "the delay in the European Commission's approval of Ryanair's offer for Aer Lingus."

"This longer time period will, we believe, allow the Commission to fully market test both the transaction and the revised remedies, which Ryanair will propose," he said.

"Ryanair remains confident that its offer for Aer Lingus - which is consistent with the Competition Commission's stated policy on airline consolidation - will win EU competition approval under the Phase II procedure."

The Irish airline's statement followed an announcement from the European Commission that it was launching an investigation into the offer because it would raise "serious competition concerns in the passenger air transport sector."

The regulator said that, in particular, the takeover bid "could reduce choice for consumers and could give rise to higher fares than would be likely if the two carriers remained separate.

It said it would decide within 90 days whether any merger would significantly impede competition in the EU area or a substantial part of it.

"My main priority on this case is to make sure that consumers would continue to enjoy a competitive choice of airline services," said EU Competition Commissioner Neelie Kroes.

Ryanair, Europe's biggest low-cost carrier, is targeting the 50.1 per cent holding that will give it management control.

The takeover bid is opposed by the Irish government, which has retained a key stake in the airline, a staff trust, the Aer Lingus management and trade unions.

Despite the widespread opposition to the deal, Ryanair has already amassed more than a fifth of Aer Lingus stock.