The ailing travel group Thomas Cook was close to abandoning hope of a private sector rescue deal on Friday evening as a City blame game engulfed the UK's oldest travel agent.

Sky News has learnt that a series of possible scenarios that were on the table in recent days have been ditched after it became clear that the company could become insolvent within hours.

Sources said that Thomas Cook, its lenders and advisers had been working on a plan earlier on Friday to devise a way of keeping its airlines in the UK, Germany and northern Europe out of administration while letting its British tour operating arm fail.

They said that plan had been discounted as being too complex.

A separate proposal which would have involved CQS Management, the hedge fund run by the London Stock Exchange Group's former chief executive, Xavier Rolet, providing a big chunk of the £200m additional funding demanded by Thomas Cook's lenders, had also been aborted.


Insiders added that in recent days Fosun Tourism Group - the Chinese company which has agreed to provide £450m to Thomas Cook in return for a 75% stake in its tour operator and 25% of its group airlines - had tweaked its offer to bondholders.

Under the revised plan, Thomas Cook's bondholders would have been able to hold shares in Fosun itself, rather than the British company's travel agency business.

However, that proposal had also been withdrawn, prompting a number of bondholders to abandon support for the rescue package.

Thomas Cook's syndicate of more than a dozen bank lenders has been criticised by unnamed sources for demanding the additional £200m of standby funding to see the company through tough winter trading - a demand revealed by Sky News last week.

People close to the situation said on Friday evening, though, that blaming Royal Bank of Scotland, one of the biggest lenders to Thomas Cook, was "a ludicrous position" given the travel group's frequent revision of its future financing needs during the last six months.

Image: On Friday, the Thomas Cook share price closed at 3.45p, more than 95% lower than at the same point last year

A request for emergency government funding was made by Thomas Cook earlier this week, with executives arguing that the cost to taxpayers would be dwarfed by the bill incurred by the repatriation, led by aviation regulators, of 165,000 customers currently overseas.

One senior Whitehall source said the possibility of a government loan on commercial terms could not be entirely discounted, but was remote.

In recent years, failing companies including Carillion, the construction group, and British Steel have seen last-ditch pleas for state financial support rebuffed.

Sky News revealed on Thursday that Thomas Cook, which was founded in 1841, was expected to crash into administration as soon as Sunday night unless a solution to its £200m funding gap could be found.

One source said that AlixPartners, the firm lined up to handle the insolvency, had approached the Official Receiver this week to seek a compulsory liquidation of the company.

'I've only got heart medication until Sunday'

That approach is understood to have been rejected.

Among the other scenarios examined by Thomas Cook this week in its desperate battle to raise cash was the sale of its Nordic operations to Triton Partners, a private equity firm with which it held talks earlier this year.

More than 20,000 jobs across the group are at risk if it collapses, with 9,000 of those jobs in the UK.

The Civil Aviation Authority (CAA), which is leasing aircraft in order to help fly British holidaymakers home under the code-name Project Matterhorn, managed a successful - albeit smaller - repatriation programme when Monarch Airlines collapsed two years ago.

Several hundred thousand people from other European countries are also current customers of Thomas Cook at scores of vacation destinations.

It would be the biggest-ever repatriation operation involving the customers of a UK-based company, and the largest evacuation of Britons since Dunkirk.

Thomas Cook had already warned that it could face collapse unless it finalises a rescue deal this month, saying in a court filing last week, revealed by Sky News, that it "would be likely to run out of money and enter into formal insolvency proceedings" if it did not.

Some 11 million customers will have travelled with Thomas Cook by the end of the crucial summer season.

Efforts to secure its rescue have been hampered by weak trading and the competing demands of financial stakeholders including its pension trustees and the holders of insurance against default on its debts.

Thomas Cook has been targeting the injection of new money from the recapitalisation by early October in order to pay hoteliers and other key suppliers.

In order to survive, it would also need to persuade the CAA, which administers the ATOL scheme covering travel companies, that it should renew its licence at the end of September for another 12 months.

Current trading at Thomas Cook is understood to have remained difficult for months, with the ongoing political crisis in Westminster contributing to soft consumer demand for autumn and winter bookings.

Shares in Thomas Cook have whipsawed for months as investors have sought to calculate whether the stock retains any residual value.

On Friday they closed at 3.45p, more than 95% lower than at the same point last year.

The British company was founded in 1841 by a 32-year-old cabinet-maker and former Baptist preacher who began offering one-day rail excursions from Leicester to Loughborough for a shilling.

From there, it went on to become one of the world's largest holiday companies, marking its 175th anniversary three years ago.

Thomas Cook, CQS, RBS and Fosun declined to comment.