The US government's war risk insurance scheme for airlines is to be extended.

The programme would run until the end of March 2008 under the new proposal, which is still subject to final approval. The scheme limits the liability of airlines to third-party damages following a terrorist attack to $100m (£61m).

The new agreement would also extend the scheme to aircraft manufacturers and vendors, and reimburse airports and airlines for the cost of security-screening.

However the bill has been delayed until last week because funding was blocked by to Congress.

A decision is expected later this week.