Donald Trump's Northern Ireland envoy has claimed that Dublin minister Simon Coveney told him the EU could threaten Britain's aviation industry if it's upset by the outcome of Brexit.
Mick Mulvaney left a meeting with Mr Coveney with the understanding that the EU could make life "very difficult" for UK airlines seeking to access the continent in such a scenario.
He made the extraordinary claim at an Institute of International and European Affairs (IIEA) webinar.
His account of his conversation with Mr Coveney prompted the Foreign Affairs Minister to insist last night that comments he made about aviation were "not a threat" but rather about the interdependence between the EU and UK beyond Brexit.
Mr Mulvaney was appointed as Mr Trump's envoy to Northern Ireland earlier this year. He met politicians in Dublin, Belfast and London during a visit in September amid the ongoing controversy over the UK's Internal Market Bill.
Mr Mulvaney said that everyone he met wants to avoid a hard border in Ireland but he had expressed concern that it could happen by accident.
He said he raised concerns with Mr Coveney that the EU could insist on controls involving the whole island or put "tremendous pressure on the Irish to do something" if Britain and Ireland refused to impose a border in a no-trade deal scenario.
He said Mr Coveney told him that "there's much larger more powerful, levers the Europeans could pull under those circumstances than a border across the island of Ireland." He added: "The example he gave for it was commercial aviation… it gets to the British some place that's a little bit closer to home perhaps and a larger economic impact."
Mr Mulvaney said he didn't go into specifics on what Mr Coveney meant by this but his guess was there may be an interconnection between state aid and commercial transportation.
He added: "I don't know. But what I took away from the meeting was that British Airways continues to want to fly from London to the continent, and if the Europeans got really, really upset, they could make BA's life very difficult."
Mr Coveney's spokesman last night insisted there had been no threat made in relation to aviation.