NATS has suffered a devastating drop in revenue following a fall in transatlantic traffic in the wake of the foot and month crisis and the events of 11 September.

However, controllers believe government plans to match any extra private sector investment for NATS will not resolve the issue.

The problem can only be resolved, they say, through a rebate of the £300 million demanded by the government over and above NATS’ outstanding debt, coupled with a change to the draconian economic regulator’s pricing regime.

At present the requirements of the pricing formula mean NATS must reduce its charges by 17% over the next five years.

Paul Noon, joint general secretary of the air traffic controllers’ union Prospect, said: "The finance structure necessary for an integrated and safe air traffic system is not conducive to open market economics or continually constraining monetary regulation.

"Banks aren’t charities and they won’t lend to companies who have fixed costs but are unable to raise their prices.

"In addition, if costs are cut, safety or investment will be adversely affected. Staff have done their bit but they will not stand by and see further cuts or pressure on terms and conditions."

Prospect is calling on the government, the largest shareholder in NATS with a 49% stake, to rebate the £300 million and help ensure safety and essential investment do not fall prey to short-term difficulties.