Ireland demands more concessions from IAG on Aer Lingus sale

* Government wants longer guarantees on Heathrow routes

* Says no deadline for improved offer

* Aer Lingus (Other OTC: AELGF - news) reports growing profit (Releads with government's new demands)

By Padraic Halpin and Conor Humphries

DUBLIN, Feb 24 (Reuters) - Ireland (Other OTC: IRLD - news) on Tuesday presented British Airways owner IAG with a list of new demands it said must be fulfilled before it would consider the sale of its 25 percent stake in Aer Lingus, including one that IAG has explicitly ruled out.

The demands appeared to harden a stand-off over the 1.36 billion euros ($1.5 billion) offer from IAG (International Consolidated Airlines Group), which Aer Lingus' board has recommended but a number of politicians have opposed.

The government did not, however, give IAG a deadline to respond to the demands and IAG issued a statement to say it would consider them.

"While I acknowledge that proposals have been out forward, I communicated to cabinet that there is not the certainty or length that I need to be able to recommend an irrevocable disposal," Transport Minister Paschal Donohoe told journalists after a cabinet meeting.

In addition to a request for more clarity on possible job cuts and planned expansion in transatlantic services, Donohoe said IAG's offer to guarantee connections between Irish airports and London's Heathrow for five years was not long enough.

Asked to give a longer commitment by politicians at a parliamentary committee two weeks ago, IAG chief executive Wille Walsh explicitly ruled it out, adding "when I make an opening offer, my second offer is actually worse than the first one."

The demands come after IAG gave the government additional information on Friday and follow the release of Aer Lingus' full-year results that showed growing profitability.

Operating profit rose 18 percent to 72 million euros before exceptional items in 2014. However, outgoing chief executive Christoph Mueller said the airline could not afford to give up the potential boost an IAG tie-up might bring.

"We are a growing company ... but every step further becomes more risky because we are the smallest competitor on the North Atlantic," Mueller told journalists in a conference call. "We cannot leave out chances of growth."

Aer Lingus shares were up 1 percent on the day at 2.25 euros at 1600 GMT, below the IAG offer price of 2.55 euros because of continued uncertainty about the deal.

Opposition to the deal has been led by members of the centre-left junior partner in Ireland's government, with Labour Party deputies indicating they may submit a motion for their national party conference later this week to block the stake sale.

A spokesman for the party said no motion had yet been received by the party's leadership and that a motion would not be binding on either deputies or government ministers. (Editing by Jason Neely, Keith Weir and David Evans)