Ananova:

The British Airline Pilots' Association is accusing Bank of Scotland of acting disgracefully in withdrawing funding from Gill Airways.

The regional airline, which is based at Newcastle airport, has been forced to send home its 240 staff.

Christopher Darke, general secretary of Balpa, claims the bank has pulled the rug from under Gill, blaming the current world airline situation following the US disaster.

"The company was doing really well in recent months, but the bank will not even let it be sold on," Mr Darke says. "They want it put into liquidation, which is an absolute disgrace."

Gill's chief executive Malcolm Naylor has said the board is shocked and desperately disappointed at the news, claiming the airline had enjoyed a period of profitable trading since being refinanced earlier this year.

The board of the 32-year-old airline believes it could have withstood the current uncertainty in the airline industry caused by the terrorist attacks in the US.

Gill says it carried a record 35,000 passengers in August on its routes between Newcastle, Norwich, Dublin, Belfast and London Stansted.

A company spokesman said it suffered a major blow this week, with 'swingeing' increases in insurance premiums which added around £340,000 to its costs.

The spokesman said an additional onerous requirement would have meant premiums being paid quarterly in advance at a time when cashflow was under pressure.

Gill has said it's trying to make arrangements for its customers to switch to British European Airways flights.