The fraught battle to acquire BMI has taken another twist after news that Virgin Atlantic has submitted a late offer for the Lufthansa-owned airline.

British Airways’ parent company International Airlines Group (IAG) reached a deal last month to buy BMI last. However the latest move sees rival Virgin signing a “terms of agreement” contract with Lufthansa.

This means that Virgin, which is owned by Sir Richard Branson, will be able to start due diligence and analyse BMI’s books to find out what the acquisition would involve.

According to The Times reported, banking sources have indicated that Virgin’s offer was lower than that made by IAG. However the airline argues that it would be able to conclude the acquisition more quickly without the regulatory scrutiny that would accompany a merger with IAG.

The Virgin offer is thought to be in the region of £50 million, while IAG’s is about double that figure.

BMI is expected to make a final decision on a buyer early in the new year.

The airline lost £140 million in the first nine months of this year and its total annual losses are likely to far exceed last year’s £123 million. However IAG and Virgin are keen to acquire its coveted take-off and landing slots at Heathrow.

If the BA deal goes ahead it would mean that IAG owns more than half of Heathrow’s landing slots, a move.