Huge rises in the cost of insurance cover for war and terrorism risks could force several UK insurers to the wall, aviation experts have warned.

The warning comes as the European Commission announced an end to the current war-risk insurance scheme. Under the current system, EU member states underwrite airlines war-risk insurance.

Aviation expert Annie Redmile said: "Some will go down. Some of the big carriers could go down as well."

The September 11 attacks exposed airlines' liability for losses, highlighting the possibility of increased claims.

Previously Europe's airlines could only obtain third party cover if the government agreed to underwrite policies. The EU granted an extension to allow national governments to underwrite insurance, but has now withdrawn the extension.

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