The newlyprivatised air traffic control service today declared it was "business as usual" amid reports that it was being pushed into bankruptcy.
National Air Traffic Services (Nats) vehemently denied reports that four banks were threatening to foreclose their loans.
Nats added that representatives of the banks were not expected to attend today's Nats' board meeting in London and that the financial situation was not due to be discussed.
It has been reported that the banks – Abbey National, Barclays Capital, Halifax and Bank of America – have demanded compensation from Transport Secretary Stephen Byers following the muchopposed Government decision to sell a 46 per cent stake in Nats.
But the Department of Transport said today that the banks, which underwrote the selloff, had not demanded compensation from Mr Byers.
Nats has run into financial difficulties following the huge downturn in air traffic following the events of September 11.
A Nats spokeswoman said today: "Since September 11 we have been engaged in very robust steps to remedy the financial situation and these have been fully supported by the banks.
"We have identified £200 million worth of cost cuts and we have applied to the Civil Aviation Authority (CAA) for a review of the prices we charge airlines for our service."
She went on: "There is no question of any ultimatum from the banks or of our going into administration."
Backbench MPs and unions were particularly opposed to the Nats selloff. The CAA was also concerned that the selloff plan might not be robust enough.
But the partprivatisation, in which employees have taken a 5 per cent stake and the Government retains 49 per cent, went ahead last July.
Shadow transport secretary Theresa May said: "This is yet another Stephen Byers blunder. Following on from problems on the railways, it now appears he is facing severe problems in aviation.
"He has to find a plan to ensure Nats stays afloat and he has to find it fast."Reuse content