Sir Richard Branson is seeking a buyer for Virgin Atlantic and has set an end-of-May deadline to save the airline from collapse after a taxpayer bailout proved beyond his reach.

The Sunday Telegraph has learnt that the pursuit of a £500m government package has been effectively shelved and that the airline is now focused on securing new private investment in the shadow of potential insolvency.

Houlihan Lokey, the investment bank hired by Virgin Atlantic, has sounded out more than 100 potential financial institutions, with “all options on the table”, sources said.

Roughly 50 potential investors have asked for information and will be whittled down to a handful of bidders.

Those on a list of parties to be contacted over potential rescue of Virgin Atlantic are understood to have included Lansdowne Partners, the hedge fund run by George Osborne’s best man Peter Davies.

However a spokesman for Lansdowne said on Sunday: "Lansdowne Partners has not be involved in any discussions regarding regarding the potential involvement in a refinancing of Virgin Atlantic and, furthermore, has no interest in doing so."

Sources said that interested parties included Singapore sovereign wealth fund Temasek and Northill Capital, the fund that is backed by Italian-born Swiss billionaire Ernesto Bertarelli.

US buy-out giant Centerbridge Partners and Wall Street distressed debt investor Cerberus Capital Management are also in the running, they added.

Insiders said that a number of parties were likely to form consortia over the coming days as they reviewed detailed financial information provided by the airline.

Suitors can offer to structure a rescue by injecting debt, equity or convertible loans, which could leave Sir Richard with no residual stake.