The Jamaican carrier, which has accumulated losses of US$1.2 billion, has been on the selling block since 2007 but Government has not been able to find a buyer.

Prime Minister Bruce Golding told Parliament yesterday that a deal with a preferred bidder had fallen through. He said Caribbean Airlines, which had modified its bid, has expressed an interest in purchasing the airline and that talks are taking place in "earnest".

Golding, who flew to Trinidad to discuss the matter with a team from Caribbean Airlines on Wednesday, said he has been having telephone conversation with that country's prime minister, Patrick Manning, concerning the possible deal.

"Caribbean Airlines has a view and a vision of one Caribbean and one airline serving the entire Caribbean. We have indicated to them that one Caribbean is wonderful and that is fine but we are a tourist destination ... tourism is part of our lifeblood," Golding told Parliament yesterday.

He added: "I am satisfied that there is a full appreciation for that and I am hopeful that we might be able to arrive at an agreement in short order that would relieve Jamaica of any further financial responsibility and preserve and protect those critical routes that are vital to us, both as a tourist destination, and protect those routes that are important for our Jamaicans living abroad and travelling abroad. I am satisfied that based on the assurance that I was given yesterday, that that is possible."