The British government said on Friday it had brokered a deal between airlines and insurers that would allow commercial air services to continue.

A dozen UK airlines, including British Airways and Virgin Atlantic, on Thursday warned the government they might have to stop flying from next Tuesday, after insurance underwriters said they would cut third-party cover to just $50m from next week in the wake of the attacks on the US.

Airlines around the world have issued similar threats after the insurance industry said it would withdraw the normal level of so-called "ground cover" of $750m from next Monday. This insures airlines against injuries to people on the ground and damage to buildings caused by an aircraft.

One airline executive warned earlier this week that carriers would be so exposed that they would have to stop flying. The sharp reduction in the cover would also breach contracts with aircraft leasing companies.

Details of the deal brokered by the British government were not immediately available but it is likely that it would have agreed to underwrite at least part of the airlines' insurance. "We have hammered out a deal to allow the airlines to continue to fly," said a government spokesman.

Other governments are expected to adopt similar measures. Loyola de Palacio, European transport commissioner, said on Friday she was unlikely to stand in the way of member states on the issue and said that insurance and other measures to help airlines would be discussed at an informal two-day meeting of European economy ministers starting Friday.