The British government has extended its "war and terrorism" insurance of the UK aviation industry for the third and final time.
The extension maintains a scheme that was agreed when commercial insurers reduced aviation cover after the 11 September terrorist attacks in the US.
The scheme, which was due to expire at midnight on 22 January, has been extended until 20 March 2002, the Treasury said in a statement.
It added that the European Union had set a deadline of 31 March 2002 for all government-backed insurance schemes for airlines to come to an end.
The extended scheme provides airlines with war and terrorism insurance for liabilities greater than $50m (£35m).
It will run from 23 January 23 to 20 March, and the government will consider whether any residual insurance support might be justified after that date, the Treasury said.
Under the scheme, third-party war and terrorism insurance for liabilities greater than $50m is offered by Troika, an insurer set up by brokers Aon, Marsh and Willis. Cover under the Troika scheme is capped at $2bn (£1.4bn).
The British government had initially offered the insurance for free, but started charging airlines from 8 November 2001, in line with guidelines set out by the European Commission.
Those state that from 1 February 2002, the premium for cover of between $50m and $150m (£104.4m) should increase to $0.40 per passenger from $0.35.
It is understood that plans for a permanent solution for war and terrorism cover will be discussed at a meeting of the International Civil Aviation Organisation in Montreal, Canada on 19 and 20 February 2002.
