The US government is looking into setting up a version of the UK's Pool Re to provide reinsurance cover against terrorist acts.

President Bush has held discussions with leading insurance industry figures about proposed legislation that will make the US government the insurer of last resort.

And the federal government has said it will compensate people injured in the September 11 attacks, as well as the families of the dead and missing, if they agree not to sue the airlines.

Airlines, already facing huge economic difficulties, had pointed out to the government that they would be bankrupted by claims.