XL boss Phil Wyatt proposed a contingency plan to keep the group’s aircraft flying in the event of a collapse – two weeks before it went bust.

But his proposal, which could have averted the need to repatriate 85,000 customers stranded overseas, was rejected because administrators could not be given financial assurances.

Administrators Kroll wanted the government to offer indemnities to offset the risk of running the airline during the repatriation period.

Wyatt (left), XL’s chief executive, said: “I went to see the CAA to explore the option that in the event of our Atols being withdrawn we could fly planes with our crews.

“Unfortunately, it was deemed by authorities, government, whoever, that this was impossible. I personally don’t believe that is the case.”

David Moesli, the CAA’s deputy director for consumer protection, said: “We were very keen to see if we could keep those planes flying.

“We were playing our role in this, but the government also had a role because Kroll was looking for an indemnity but it was not possible to give the administrator the protection it wanted.”

Wyatt said talks about finding new investors continued until 9pm on Thursday, and some “individuals” were interested even at that stage.

He said refinancing efforts would have been easier if the group’s former Icelandic owner, Eimskip, had released a note regarding loan guarantees earlier.

“This business would not have failed,” he said.