A furious Sir Richard Branson rounded on the Government after his airline, Virgin Atlantic, lost out to arch rivals British Airways in a route battle.
BA, which operates six flights a week between London and Cape Town, had objected to a decision by the Civil Aviation Authority to allow Virgin to fly a second service on this route.
Today, Deputy Prime Minister John Prescott overturned the ruling and said the extra frequency should go to BA.
"I've heard of crass decisions by government before but this one beats them all," said Sir Richard, the Virgin chairman.
He went on: "I had hoped that the days of unreasonable, heavy-handed state intervention were over."
Last December, the CAA allowed Virgin to increase their weekly flights between London and Cape Town from one to two.
Sir Richard said today: "Now the Department of Transport in its wisdom wants to reduce competition and give BA one of our frequencies - putting them up to seven a week and reducing us to just one."
BA said it would now operate a Boeing 747 jumbo jet on the route "making available about 30,000 more seats a year than the (Airbus) A340 aircraft which was offered by Virgin".
BA added that the decision today was "excellent news for our customers who will now have a choice of daily flights to Cape Town".
Virgin is particularly upset as two years ago the Government overturned a CAA decision to allow the airline on the London-Moscow route. BA is still the only UK carrier on this route.