JOHN MACGREGOR, the Transport Secretary, attacked the US stance on 'open skies' air liberalisation last week, as talks designed to push through British Airways' controversial dollars 750m ( pounds 470m) investment in USAir reached deadlock.

'The Americans are going for open skies - minus,' said Mr MacGregor on Friday. 'They cannot deliver the measures we would like to see, including allowing foreign airlines to own up to 49 per cent of their carriers, which is something we have offered them.'

According to the Transport Secretary, whose talks with Andrew Card, his US opposite number, stalled last week, Washington is also refusing to give up US internal cabotage rights - the domestic airlines' monopoly to carry passengers between US cities. 'This gives them a big competitive advantage,' said Mr MacGregor. Talks should resume on Tuesday.

BA's chances of securing US approval for a 44 per cent stake in USAir - giving 21 per cent voting rights - by 24 December are looking increasingly slim, though it is possible the two airlines could extend the deadline. The Americans are insisting that US carriers are immediately offered greater access to London's airports, particularly Heathrow, and also unfettered access to big British regional airports.

British officials are resisting the first demand, but in return for US approval of the BA- USAir link, have offered to introduce more competition in flights to and from US cities.

Britain maintains that US carriers will not invest for greater competition. 'BA is prepared to invest dollars 750m of highly risky capital in USAir, but none of the Americans were prepared to put money into Dan-Air,' said one official.

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