British Airways has sacked 7,000 staff and cut flights by 10 per cent in an attempt to address "the anticipated reduction in demand" following terror attacks on New York and Washington.

The move has provoked trade union fury and calls for the government to bail out an industry already hit by a long-term problems that have been compounded by the traumatic events of the last week.

Flights are to be slashed by 10 per cent in addition to previously announced reductions, 20 BA aircraft are to be withdrawn form service and 7,000 jobs are to be axed.

"We face exceptional conditions which have forced us to take very tough decisions. The tragic events in the USA will undoubtedly have a significant impact on the demand for air travel in the months ahead. We have taken the necessary steps to curtail expenditure and sadly to cut our workforce. Wherever possible we will try to achieve these cuts by voluntary means. We are currently in consultation with our unions," said BA chief, Rod Eddington.

BA claims that the cuts are necessary to protect the airline's future in the long-term.

"Despite the difficult market, our balance sheet remains strong and we are a well-established business. However, we must act now to protect British Airways for the long term," said Eddington.

The move has triggered an angry response form trade union leaders w ho accuse BA of panic and have called on the government to protect the industry and employees.

"At this time of world turmoil, the last thing we need is a knee-jerk reaction from aerospace companies and airlines that will compound the misery by cutting jobs and throwing thousands on to the scrap heap,'' said Roger Lyons, general secretary of the MSF union.

Sir Ken Jackson, general secretary of the AEEU, said: `"The economic effects of last week's tragedy are clearly going to be felt by employees around the world. We are beginning discussions with the government to make sure that British employees are offered the best protection available to weather this storm.''

Sir Ken is set to present transport secretary, Stephen Byers, with a four-point plan, calling for a government study to independently establish the impact of the current crisis on demand for air travel, and to help with paying for extra security measures.

`"Thousands of jobs are at risk this week unless the government acts on this plan," he warned.

Outspoken TGWU chief Bill Morris said that the losses were worse than anyone had thought and called on the government to come to the aid of Britain's civil aviation industry in the same way it had helped foot and mouth hit farmers.

"We knew that the news would be bad in the announcement due later this morning. What we didn't expect was bad news of this magnitude. It is bad news, not just for the civil aviation industry. It will impact on manufacturing, tourism, and of course the service sector. What we need now is remedial action. The state of the crisis in the civil aviation industry is bigger than foot-and-mouth and its impact is as bad as Rover's would have been in the West Midlands had the government not taken some sort of action," he told BBC radio.

Calling for a "calm and measured approach" Morris argued that the UK government should emulate the US and called for the setting of a civil aviation task force.

"The American government is setting aside significant sums of money to assist the American airlines. We need to make a considered assessment. One of the things we did quite successfully in managing the Rover crisis in the West Midlands was to set up a task force so we have got a good track record, a good experience, and we manage our way what is now becoming a crisis for the civil aviation industry generally and British Airways in particular," he said.