The Irish Independent reports that no matter how much Fianna Fail and the Progressive Democrats try to pretend otherwise, the opposition parties have managed to set the political agenda.

The Irish Independent also reports that another Dartmouth Square-style row is brewing in the capital.

The Irish Times Business Editor John McManus writes in an opinion article that the unveiling by the Dublin Airport Authority of its plans for a second terminal at Dublin Airport provoked what appeared to be a typical enough response from Michael O'Leary.

Within a matter of days he availed of a press conference to announce new routes from Dublin to get stuck into the DAA, who want a 25 per cent increase in passenger charges - to €7.50 - to pay for the 75,000sq m building.

O'Leary wants the cost to be borne predominantly by the users of the €395 million new terminal - Aer Lingus passengers. It was vintage stuff: "The Government promised to give us a competing second terminal. It turns around three years later and says no, the same idiots who've made such a mess of Dublin Airport should now build the second terminal. Why? Well because they have proven to be world leaders in incompetence, muddle and fudge."

But when it actually came down to what Ryanair might do, O'Leary was evasive. A "fuller statement" was promised but as of the end of last week it had not materialised and O'Leary declined to comment on whether Ryanair would object to the terminal via the planning process.

O'Leary is clearly weighing up his options. In many ways his bluff has been called by the DAA already. His decision to start adding routes out of Dublin in the last year - despite failing to get his way on either the terminal issue or landing charges - is a clear indicator that Ryanair could not afford to ignore indefinitely the business available as a result of the economy's strong performance.

And it certainly could not afford to do so as Aer Lingus crawled its way to a stock market flotation predicated on increased short-haul traffic out of Dublin .

In fact, one suspects the issues raised by the Aer Lingus flotation have made O'Leary stop and think about his response to the second terminal.

Amongst the long list of risk factors contained in the Aer Lingus IPO document is item 2.1, which reads: "Dublin airport is currently Aer Lingus's principle base airport, on which it is dependent. Aer Lingus's expansion plans are heavily dependent on the development of Dublin airport and the availability of sufficient additional capacity there . . ."

It then goes on to say that Aer Lingus expects to benefit from the opening of any new terminal and the increased capacity offered but adds that this "poses significant risks, costs and challenges, including completion risk and risks associated with starting operations".

The point is then hammered home with the airline warning that if the plan is not implemented "as is currently anticipated or delayed Aer Lingus could incur greater unexpected costs and its expansion plans and overall growth strategy could be significantly curtailed".

The second terminal at Dublin airport is clearly Aer Lingus's Achilles' heel and, standing where we stand today, the man best placed and most likely to exploit it is O'Leary. All he needs is some sort of smokescreen to obscure his motives for delaying the second terminal. What could be better than the usual guff about protecting passengers from the DAA's incompetence?

Needless to say, this particular conspiracy theory has a great deal of currency in DAA circles as its premise is that the second terminal plan is sound and O'Leary's objections - should they materialise - have an ulterior motive behind them.

To support this view they claim that Ryanair has been kept in the loop for the second terminal and seemed comfortable with it in the context of a wider plan that envisaged a third terminal - in effect a Ryanair terminal in the way that Aer Lingus is the anchor tenant in the second terminal - to the north of the current one.

They claim that in recent weeks there has been something of a change of heart and Ryanair has reverted to a more hostile position, namely its long-term ambition to construct its own terminal. This is seen by DAA insiders as O'Leary laying the groundwork for a pitched battle over the second terminal.

The bad news for Aer Lingus is that either way O'Leary is going to cause trouble for them. He just has to decide what sort of trouble it will be.

It's not too late for him to play ball with the DAA on the second terminal and in the process wring a few concessions out of them. The result will be even more competition from Ryanair out of Dublin on those short-haul routes to Europe that are meant to provide Aer Lingus with growth over the next few years.

The alternative trouble is for O'Leary to take his planes elsewhere and do his best to strangle Aer Lingus at birth by wreaking havoc over the second terminal.

It's hard to know which type of trouble he will enjoy making most.

The Irish Times also reports that major changes to stamp duty on houses are to be considered today by the Progressive Democrats in a push for new tax cuts after the next general election. The party will be given a series of options to consider from a package drawn up by party experts.

 These options will include the abolition of stamp duty, a major reduction in rates, or, most interestingly, changes to allow householders pay the duty over the lifetime of a mortgage rather than in one lump sum, as currently happens.

Stamp duty on homes is increasingly important to the Exchequer: it has netted the Government €1.9 billion so far this year - an increase of 43 per cent on the same period last year - and is expected to raise €3 billion for 2006.

The Institute of Professional Auctioneers and Valuers recently said that the tax thresholds must be widened in the December budget to ease the pressure on homebuyers struggling with higher prices and rising interest rates.

Newly elected PD leader, Tánaiste Michael McDowell, will emphasise the need to cut tax after the PD parliamentary party's one-day meeting in Malahide today.

However, its tax options are part of the party's election manifesto, and will not be a budget-day demand, the party made clear last night.

First-time buyers pay no duty on houses valued up to €317,500; a 3 per cent rate is applied to buyers of properties valued between €317,500 and €381,000; 6 per cent on those valued up to €635,000, and 9 per cent on properties above that.

Work on the PDs' tax document has been strongly encouraged for months by Mr McDowell, who also contributed to an earlier paper presented last April to the PD annual conference in Limerick.

Then, Mr McDowell and Cork-based Senator, John Minihan, suggested the top tax rate should fall to 40 per cent. The standard rate of 20 per cent would apply to single people earning less than €50,000, or €100,000 for couples.

Meanwhile, the party's newly elected deputy leader, Dublin South TD Liz O'Donnell, has sharply criticised one of the party's leading figures, Paul Mackay, over his criticism of former leader Mary Harney, describing his contribution as "inappropriate and unhelpful".

Speaking last weekend, Mr Mackay had said Ms Harney had given three different dates for her retirement before she decided to stay on last June.

The Irish Examiner reports that the latest trade mission to South Africa by Enterprise Ireland expects to generate about €85 million worth of orders.

Leading the delegation to South Africa today is Trade Minister Micheál Martin accompanied by Enterprise Ireland chief executive Frank Ryan.

Last night, an Enterprise Ireland spokesman said: “The mission was hoping to generate €85m in new orders that would push Irish exports to SA to over €500m by the end of this year.”

Last year, total sales from Ireland to the rapidly expanding South African economy totalled €425m.

More than 100 Irish firms now sell their produce to South Africa.

Mr Martin said: “One of the key objectives of this Enterprise Ireland trade mission is to assist Irish companies to win business in South Africa and in particular to actively explore the potential for developing mutually beneficial alliances between South African and Irish companies, as well as further strengthening existing relationships between our two countries and focus in particular on what can be identified as areas of significant future potential.”

Today, 30 Irish companies representing a wide spectrum of Irish enterprise set off to visit Pretoria, Johannesburg and Cape Town.

Some of their key targets are the rapidly expanding telecommunications industry and other key sectors of the South African economy.

The telecoms segment of the economy alone boasts 3,000 companies and is growing solidly and is worth close to €5 billion.

Expansion last year was at the rate of 7.4% and further strong growth is forecast in the years ahead as the South African economy continues to modernise.

Since independence in 1994, South Africa has started the slow process of becoming a fully integrated modern economy.

The country’s mobile phone market has one of the highest take-up rates in the world since it was launched in the mid-1990s. It is growing at over 50% and is ranked as the fourth fastest growing mobile market in the word, according to Enterprise Ireland.

For South Africa, opening up and liberalising the entire telecommunications market has become a key priority in its drive to boost economic growth. Enterprise Ireland’s spokesman said Irish companies were very keen to get a part of that action.

Apart from telecoms, Irish companies on this week’s mission are keen to exploit emerging markets in IT, banking, construction, financial services, public sector/utilities and education and training.

The Financial Times reports that BP, Europe’s second-biggest listed energy group, is set to launch a root and branch review of its global operations in response to last year’s Texas City refinery blast, in which 15 people died.

The revamp, to be led by John Mogford, vice-president of safety and operations, is likely to take 5-10 years and is on a scale similar to the overhaul Exxon began after its huge oil tanker spill at Alaska’s port of Valdez in 1989.

Lord Browne, BP’s chief executive, has described the Texas City blast as a “fault line” that has forced the company to examine its entire operation.

“Very rarely do companies have tragedies of that scale. The last time BP had one was about 40 years ago. And it fundamentally changed the way we did business. I believe Texas City does that to us,” he said on a visit to Alaska last month.

The overhaul may help alleviate growing investor concerns which have seen five of the company’s leading shareholders, including F&C and Morley, seeking one-to-one meetings with management. Last week, the investors raised concerns that BP’s growing list of US troubles may indicate a systemic problem.

Exxon’s shake-up helped make it the world’s safest and financially successful energy group. After the 1989 spill, Exxon revamped its approach to safety, centralised its businesses and created an internal communications system that improved everything from financial prudence and physical caution to technological innovation.

BP’s planned reforms will involve standardising procedures worldwide and unifying the operations BP was unable to fully integrate after its US acquisition spree in the late 1990s.

BP stresses that this review will be a bottom-up approach involving management listening to local operations staff. Senior management are said to be concerned that a too swiftly implemented revolution could do more harm than maintaining the status quo. Mr Mogford’s team will include a staff of 45 with another 45 auditors.

BP has already instituted specific management changes in the US, including appointing Bob Malone as the region’s president. More changes are expected within the next few days.

The company faces investigations by the justice department and other US government agencies over trades it made in 2004, the Texas City fire, and the August shutdown of its Prudhoe Bay Field in Alaska because of corrosion.

On Sunday night it emerged Lord Browne may now be forced to give sworn videotape evidence for the civil cases arising from the Texas City explosion.

The FT reports that the US Chamber of Commerce has warned that the auditing profession is “on the edge of disaster” if regulators, business and auditors do not tackle the enormous litigation liabilities faced by the “big four” firms.

It reflects concern over the possibility that one of them – PwC, Deloitte, KPMG or Ernst & Young – could collapse if multi-million dollar lawsuits brought for alleged negligence bring a firm’s partnership to its knees.

The issue has haunted the financial services industry since claims against auditors began to increase in number and size in the 1990s, particularly in the US.

Last year, the US Department of Justice reached a settlement with KPMG over past sales of abusive tax avoidance schemes.

Auditors’ risks will be discussed today in Chicago at the first of a series of meetings held by a special capital markets commission formed by the chamber.

It is co-chaired by William Daley, chairman of JPMorgan Chase’s Midwest region and a former commerce secretary in the Clinton administration.

Mr Daley told the Financial Times: “It’s not that long ago that one of the big four came pretty close to being indicted. Had that firm gone down, the likelihood that the remaining three could have picked up the burden is pretty small because their risk would skyrocket. Whether that risk is manageable in the structure of partnerships is difficult to envision.”

David Chavern, the chamber’s chief of staff, said: “You have a system that is kind of on the edge of disaster and somebody’s got to untie this Gordian knot between auditors, issuers and liability problems.”

According to the American Assembly, a public policy forum, the big four audit about 97 per cent of US public companies with annual sales of $250m-$5bn.

The warning by the chamber, which lobbies on behalf of over 300,000 US businesses, echoes comments made six months ago by James Turley, chairman and CEO of E&Y.

He said the prospect of losing another big accounting firm “must be recognised as a global economic concern”.

Mr Daley said the next tier of firms lacked the capacity to take on the business of a collapsed larger firm.

“We think it’s a substantial issue for the capital markets as to whether they are viable to handle the requirements of these companies, many of which are global and have enormous needs which can’t be spread out amongst 10 firms,” he said.

Charlie McCreevy, the European Union internal market commissioner, is within weeks expected to receive reports on the financial burden faced by auditors from Aon, the US insurer.

Mr Daley suggested three possible solutions: stepping up arbitration to mediate disputes; the establishment of a special court to deal with lawsuits against accounting firms; and securitisation of some of the firm’s liabilities.

But there was still a lack of awareness about the problem. “I don’t think the general public, much less the policymakers, are attuned to this as an issue. It’s the elephant in the room that a lot of people want to ignore.”

The New York Times reports that a secret investigation of news leaks at Hewlett-Packard was more elaborate than previously reported, and almost from the start involved the illicit gathering of private phone records and direct surveillance of board members and journalists, according to people briefed on the company’s review of the operation.

The effort received some degree of supervision from three officials — Patricia C. Dunn, the company’s chairwoman, along with its general counsel and another staff attorney — but was quickly farmed out to a network of private investigative firms early last year, according to descriptions of the findings. It is still unclear how much they knew of the details.

Those briefed on the company’s review of the operation say detectives tried to plant software on at least one journalist’s computer that would enable messages to be traced, and also followed directors and possibly a journalist in an attempt to identify a leaker on the board.

The revelations at Hewlett-Packard, the computer and printer maker that helped define Silicon Valley, have provided a rare glimpse of boardroom turmoil — resulting in Ms. Dunn’s agreement to step down as chairwoman in January, and two resignations from the board.

But they have also cast a harsh light on the questionable and possibly illegal techniques used in the episode, raising the possibility of criminal charges.

The account of those briefed on Hewlett-Packard’s review of the matter sheds new light on the scope and timing of the investigative methods, establishing that invasive and possibly illegal techniques were used far earlier than previously known and that the company’s chief ethics officer was among those providing supervision.

The hunt for a boardroom leaker began as early as January 2005, with a focus on disclosures immediately preceding the ouster of Carleton S. Fiorina as chairwoman and chief executive, with a second phase that began a year later. Hewlett-Packard has said that as a public company, it had a responsibility to stop unauthorized disclosures.

But the review reveals that the investigation by its detectives was notable for a lack of close supervision by company officials.

Those briefed on the internal review said that at various times, questions were raised about the legality of the methods used. They did not identify who raised the questions, when, or to whom they were addressed. But a crucial legal opinion, its origins previously undisclosed, was supplied by a Boston firm that shares an address and phone number with a detective firm on the case.

Those speaking about the company’s review would do so only if they were not identified. A Hewlett-Packard spokesman yesterday declined to comment on their account.

In addition to scrutiny by prosecutors, a House subcommittee has entered the case, asking for documents on the internal investigation to be delivered today in advance of a Sept. 28 hearing in Washington.

Some of those documents are expected to reveal that detectives made several attempts at direct surveillance of some directors, and were given photos of reporters to help identify them.

At least one reporter, Dawn Kawamoto of the online technology news service CNET, may have been followed as part of the 2006 investigation, said a person briefed on the investigation. Ms. Kawamoto was a co-author of an article on a senior management meeting in January.

The detectives also tried to plant software in the computer of an unspecified CNET reporter that would communicate back to the detectives, people briefed on the company review said. Ms. Kawamoto said in an interview this month that prosecutors had told her that such a ploy may have been used, but said she was not aware of any surveillance.

Representing themselves as an anonymous tipster, the detectives e-mailed a document to a CNET reporter, according to those briefed on the review. The e-mail was embedded with software that was supposed to trace who the document was forwarded to. The software did not work, however, and the reporter never wrote any story based on the bogus document.

On Saturday, the company identified one of two employees who it said had been a target of scrutiny in the internal operation. It said the private phone records of the employee, Michael Moeller, director of corporate media relations, were taken.

It is not clear why Mr. Moeller, whose job it is to speak with reporters, was included in the operation. Robert Sherbin, Hewlett-Packard’s vice president for external communications and Mr. Moeller’s boss, said yesterday, “Investigators’ suspicions were misdirected and were unfounded.” He would not elaborate.

Although the company said others outside the company were also targets of detectives, it has not identified those people.

According to those briefed on the internal review, the Hewlett-Packard investigation had two stages: from January to August 2005, when nothing of substance was turned up, and again in January 2006, after the CNET article appeared.

The first call for an investigation from the board came in January 2005 after The Wall Street Journal published an article that cited discussion of the board about a management reorganization and changes in the responsibilities of Ms. Fiorina, then chairwoman and chief executive.

An article in The New York Times on Feb. 10, recounting Ms. Fiorina’s ouster by the board, contained extensive details of a directors’ meeting and fueled the desire to plug leaks.

Reporters from those two newspapers, CNET and Business Week have been told by the California attorney general’s office that they were targets in the operation.

Within 60 days, the investigation into the leaks was up and running, according to those briefed on the company review. Responsibility for the investigation was delegated to the company’s global investigations unit, based in the Boston area. Those company officials turned the effort over to Security Outsourcing Solutions, a two-person agency that hires specialists for investigations.

That firm hired Action Research Group, an investigative firm in Melbourne, Fla. The actual work of obtaining the phone records was given to other subcontractors, one of which is said to have worked in or near Omaha. The methods were said to have included the use of subterfuge, a practice known as pretexting, in which investigators pose as those whose records they are seeking.

Previous accounts of the Hewlett-Packard operation have focused on the use of such methods in the 2006 phase of the investigation, but not in its earlier phase.

Federal and California prosecutors, as well as the Congressional subcommittee, are examining the chain of detectives for possible criminal wrongdoing in obtaining phone records. The California attorney general said last week that he had enough evidence to indict people inside and outside the company.

Hewlett-Packard has steadfastly refused to identify any of the investigators it used, including its own.

People briefed on Hewlett-Packard’s review of its internal investigation say that it was authorized by Ms. Dunn, the chairwoman, and put under the supervision of Kevin Hunsaker, a senior counsel who is the company’s director of ethics. But it is not clear what level of supervision he gave to the project.

Ms. Dunn has said in recent interviews that she could not supervise the investigation because she was also a potential target. She has said she turned to the company’s security department in April or May 2005 for an initial investigation, then asked Ann O. Baskins, the company’s general counsel, for help in the further investigation last January. Ms. Baskins supervises a team of more than 100 lawyers around the world.

At at least one point, the company’s lawyers sought a legal opinion. But it did not come from Hewlett-Packard’s own outside counsel, Larry W. Sonsini of Wilson Sonsini Goodrich & Rosati, an eminent Silicon Valley law firm.

Instead, the company asked one of its contractors, Security Outsourcing Solutions, which turned to a Boston lawyer, John Kiernan of Bonner Kiernan Trebach & Crociata, for the opinion. Mr. Kiernan’s office shares a Boston address and phone number with Security Outsourcing Solutions.

The company, in a recent filing with the Securities and Exchange Commission, said it had received an outside counsel’s opinion that the investigative methods were legal, but it did not identify the source.

It is also not clear whether company lawyers were aware of the close business and personal ties between Mr. Kiernan, Ronald R. DeLia, the owner of Security Outsourcing Solutions, and Anthony R. Gentilucci, the Boston-based manager of global investigations for Hewlett-Packard.

Executives and lawyers back in the company’s Palo Alto, Calif., headquarters remained in the dark even after a summary report was produced for them about each of the two phases of the operation, according to those briefed on the review. Neither of the reports, they said, outlined the methods used.

There were discussions of phone numbers and calls in the report. But it is not clear why that fact apparently did not raise alarm among any Hewlett-Packard lawyers about the means used to gain the information.

The findings were presented to the board at a meeting in May, with George A. Keyworth II, the board’s longest-serving member, identified as a source of leaks. He refused an initial request to resign, though he ultimately agreed to do so last week. But a fellow director, Thomas J. Perkins, a Silicon Valley venture capitalist, resigned immediately over the handling of the investigation.

It was only through subsequent inquiries to Mr. Sonsini that Mr. Perkins learned more about the methods used. It was his determination to get the company to acknowledge the reasons for his departure that brought the internal investigation into the spotlight this month.

In an e-mail message to Mr. Sonsini on June 19 , Mr. Perkins asked about the legality of obtaining private phone records without a subpoena. Mr. Sonsini responded that Ms. Baskins had “looked into the legality of every step of the inquiry and was satisfied that it was conducted properly.”

According to those briefed on the company’s review of its investigation, there is no indication that Mr. Sonsini, considered the most powerful lawyer in Silicon Valley, was involved in seeking outside investigators for Hewlett-Packard in 2005 or 2006. He became involved, they said, only when the board asked him for a legal opinion of the investigation and the methods used.

Mr. Sonsini has said that his direct involvement in helping the board trace news leaks was limited to interviews with directors in early 2005.

Mr. Sonsini told the board in August, after his firm’s investigation of the detectives’ methods, that the use of pretexting “was not generally unlawful.” The law firm could not say whether the detective agencies hired by Hewlett-Packard, or the subcontractors any of them used, “complied in all respects with applicable law.”

The NYT also reports that researchers plan to announce on Monday that they have created a silicon-based chip that can produce laser beams. The advance will make it possible to use laser light rather than wires to send data between chips, removing the most significant bottleneck in computer design.

As a result, chip makers may be able to put the high-speed data communications industry on the same curve of increased processing speed and diminishing costs — the phenomenon known as Moore’s law — that has driven the computer industry for the last four decades.

The development is a result of research at Intel, the world’s largest chip maker, and the University of California, Santa Barbara. Commercializing the new technology may not happen before the end of the decade, but the prospect of being able to place hundreds or thousands of data-carrying light beams on standard industry chips is certain to shake up both the communications and computer industries.

Lasers are already used to transmit high volumes of computer data over longer distances — for example, between offices, cities and across oceans — using fiber optic cables. But in computer chips, data moves at great speed over the wires inside, then slows to a snail’s pace when it is sent chip-to-chip inside a computer.

With the barrier removed, computer designers will be able to rethink computers, packing chips more densely both in home systems and in giant data centers. Moreover, the laser-silicon chips — composed of a spider’s web of laser light in addition to metal wires — portend a vastly more powerful and less expensive national computing infrastructure. For a few dollars apiece, such chips could transmit data at 100 times the speed of laser-based communications equipment, called optical transceivers, that typically cost several thousand dollars.

Currently fiber optic networks are used to transmit data to individual neighborhoods in cities where the data is then distributed by slower conventional wire-based communications gear. The laser chips will make it possible to send avalanches of data to and from individual homes at far less cost.

They could also give rise to a new class of supercomputers that could share data internally at speeds not possible today.

The breakthrough was achieved by bonding a layer of light-emitting indium phosphide onto the surface of a standard silicon chip etched with special channels that act as light-wave guides. The resulting sandwich has the potential to create on a computer chip hundreds and possibly thousands of tiny, bright lasers that can be switched on and off billions of times a second.

“This is a field that has just begun exploding in the past 18 months,” said Eli Yablonovitch, a physicist at the University of California, Los Angeles, a leading researcher in the field. “There is going to be a lot more optical communications in computing than people have thought.”

Indeed, the results of the development work, which will be reported in a coming issue of Optics Express, an international journal, indicate that a high-stakes race is under way worldwide. While the researchers at Intel and Santa Barbara are betting on indium phosphide, Japanese scientists in a related effort are pursuing a different material, the chemical element erbium.

Although commercial chips with built-in lasers are years away, Luxtera, a company in Carlsbad, Calif., is already selling test chips that incorporate most optical components directly into silicon and then inject laser light from a separate source.

The Intel-Santa Barbara work proves that it is possible to make complete photonic devices using standard chip-making machinery, although not entirely out of silicon. “There has always been this final hurdle,” said Mario Paniccia, director of the Photonics Technology Lab at Intel. “We have now come up with a solution that optimizes both sides.”

In the past it has proved impossible to couple standard silicon with the exotic materials that emit light when electrically charged. But the university team supplied a low-temperature bonding technique that does not melt the silicon circuitry. The approach uses an electrically charged oxygen gas to create a layer of oxide just 25 atoms thick on each material. When heated and pressed together, the oxide layer fuses the two materials into a single chip that conducts information both through wires and on beams of reflected light.

“Photonics has been a low-volume cottage industry,” said John E. Bowers, director of the Multidisciplinary Optical Switching Technology Center at the University of California, Santa Barbara. “Everything will change and laser communications will be everywhere, including fiber to the home.”

Photonics industry experts briefed on the technique said that it would almost certainly pave the way for commercialization of the long-sought convergence of silicon chips and optical lasers. “Before, there was more hype than substance,” said Alan Huang, a former Bell Laboratories researcher who is a pioneer in the field and is now chief technology officer of the Terabit Corporation, a photonics start-up company in Menlo Park, Calif. “Now I believe this will lead to future applications in optoelectronics.”