As minister for labour, Mr Ahern argued that the six hotels, which formed the Great Southern chain, should be retained in State ownership.
The six hotels were the Great Southern in Killarney and in Galway, the Torc in Killarney, Parknasilla in Sneem, the Corrib in Galway, and the Rosslare.
State papers reveal that Mr Ahern’s cabinet colleagues — the minister for finance, Ray MacSharry, and the minister for tourism and transport, John Wilson — were against any delay in selling the hotel group, which was then in the ownership of CERT, the State training agency for the hotel industry.
Mr Ahern said the group had moved from a loss of £1.1m, in 1983, to a profit of £345,000, in 1986, and was confident that it was on target to return a profit of £400,000 in 1987.
In 1983, the then minister for transport, Jim Mitchell, had recommended the sale of the hotel group, but the government had decided, at the time, to retain it under State control, but to transfer it from CIÉ to CERT.
The following year, the government approved £14m funding to help the group and it provided a further £2.7m in 1986.
Mr Ahern argued that the board of the hotel group had made major improvements in its operations and it had returned to profitability, despite difficult times for tourism.
Mr Ahern, who later became Taoiseach and Fianna Fáil leader, and who regularly spent his summer holidays in Parknasilla, also expressed fear that the hotels would be not retained as a group, if placed on the market.
Mr Ahern said he believed the group could make a suitable return to the Exchequer on its investment, in the medium-term.
However, Mr MacSharry and Mr Wilson said they believed the hotel could make an equal, if not greater, contribution to tourism if in the private sector.
Mr MacSharry said he seriously doubted the group would return money to the Exchequer and he said that the proceeds of the sale of the hotels were needed to alleviate the severe economic pressures on the public purse.
He claimed the only alternative to a sale would be a requirement for the government to continue to invest scarce resources in the group. Mr Ahern agreed that no further State funding should be provided to the hotels.