European airspace could be poised for a radical shake-up after Germany’s state-owned air-traffic service, Deutsche Flugsicherung (DFS), has confirmed an interest in acquiring a shareholding in the UK’s National Air Traffic Services (NATS).

The UK government currently owns a 49-percent stake NATS, but stated last year that it was ready to sell up too boost the public coffers. NATS is estimated to be worth in the region of £500m.

The Government is yet to formally start an auction of its stake and reveal whether it will keep any shares.

NATS was initially part-privatised in 2001 when a group of airlines, including British Airways, acquired 46pc and staff took 5pc

“We believe there could be good co-operation,” a DFS spokesman told The Telegraph. “We already have good co-operation with NATS and the operational side of the business is not bad.”

However, the potential sale of a controlling stake in Britain’s air space to a foreign investor is expected to spark controversy.

DFS, which manages Germany’s military air traffic as well as civil aircraft, is understood to have asked investment banks to pitch as advisers on a potential deal last week.