A new aviation insurance facility that offers 12-month non-cancellable cover has been launched, but brokers fear that it will not solve the crisis looming over the industry.

Jonathan Palmer-Brown, chairman of theLondon Market aviation executive committee said that if government support were withdrawn, airlines, airports and ground handlers would be able to buy limited cover at high prices.

"They are all facing the bills for limited cover. They have no choice.

"There is not enough capacity and cover at a reasonable pricing level, but they will be able to get something to pass them through the regulatory issues," he said.

AIG, Berkshire Hathaway and Axis Specialty are offering the new excess liability cover with limits up to $1bn (£642m) per occurrence per aircraft up to an annual aggregate maximum of $2bn (£1.3bn).

It costs 80 cents a passenger, unless primary insurance is cancelled in which case it fills in for the first $50m (£32m) of cover on passenger liability at an extra $2 a head.

The cover is automatically terminated in the event of nuclear hostilities, but otherwise cannot be cancelled, except for non-payment of premiums or mutual agreement between insureds and insurers.

Insurer's insistence on being able to cancel cover at seven days' notice has led airlines to argue that they need government support, because the marketing is not yet functioning properly.

The government-backed Troika scheme was almost certain to be withdrawn today. However, as late as Tuesday, the Treasury was unable to say it would definitely end.

This followed an application by Germany to the European Commission to renew its government-backed scheme. If successful, the UK may want to follow its lead.

A spokesman said the UK had not made a similar application but was watching events carefully.

"We will have to see what the others get," he said.

"It's too early to say what the UK would say [if Germany were successful]."

The AIG, Berkshire Hathaway and Axis scheme is targeted only at major airlines which carry about five million passengers a year. It does not assist airports or ground crew.

Palmer-Brown said: "If you've got a limited number of people covered with a limited aggregate it doesn't solve the problem."

Palmer-Brown said the key issue in the market was the progression of the International Civil Aviation Organisation-proposed global cover.

It now has 40.42% support, despite a no vote from Japan, which holds 14% of the vote.