BA and Virgin resume talks

BRITISH AIRWAYS and Virgin will resume their long-running peace talks tomorrow after they broke down on Friday. Agreement appeared to have been reached - Virgin was on the verge of issuing a press release to that effect - when a last- minute change of heart by BA scuppered the deal.

The level of compensation to be paid by BA for conducting a dirty tricks campaign against Virgin is understood to have been settled at pounds 15m. But the main stumbling block is over future references by Virgin's Richard Branson and his staff to the dirty tricks campaign. Mr Branson was prepared to hand back documents on the affair to BA's lawyers.

They would keep the papers for five years, during which time he would not refer to them. BA is believed to have gone further, however, and demanded that Mr Branson never talk about the dirty tricks again - not even, for example, during discussions with the aviation authorities about competition issues. Mr Branson is thought to find that demand unacceptable.