Prescott fails to placate rebels on air control sale

The threat by Labour rebels to vote against the Government over the part-privatisation of the National Air Traffic Services (Nats) remained last night despite a strong defence of his plans by John Prescott, the Deputy Prime Minister.

As part of efforts to head off the rebellion, Lord Macdonald of Tradeston, a Transport minister, will meet unions tomorrow to outline his eight-point plan for air safety. It will include assurances that the Civil Aviation Authority will have to be satisfied about developments in air traffic control and will carry out inspections of Nats units.

Brian Donohoe, one of the leading Labour rebels, called on the Government to accept an 11th-hour compromise with an amendment to the Transport Bill before the vote next week. He has drafted amendments to prevent Britain's security from being undermined by foreign buyers taking a stake in Nats.

The Independent has learnt that Geoff Hoon, the Defence Secretary, wrote to Mr Prescott last week giving his total support and denying reports ofdefence reservations over the plan. Ministers are adamant that European Union rules prevent a ban on French or Germany companies buying shares in Nats, and say the moveshould be seen as an opportunity for Nats to take over continental air traffic systems.

Mr Donohoe said: "Even at this late stage, we have got to look at the potential for a compromise. There is fairly broad concern about this." The MP for Cunninghame South is a member of the Labour-dominated Transport Select Committee,which attacked the plans.

Mr Prescott gave no ground when he faced criticism from the rebels at the weekly meeting of the Parliamentary Labour Party at the Commons. A party source said: "It was a typical barnstorming performance by the Deputy Prime Minister. There will be some who will vote against the Government, but they are the usual suspects. We don't expect the rebellion to amount to more than 40 MPs at the most."

Mr Prescott told the MPs that allowing 46 per cent of shares in Nats to be sold to the private sector "would not compromise a lifetime's commitment to improving safety". He said the money raised would allow the Chancellor to devote funds to health and education.