Boeing is expected to announce today that its 787 Dreamliner has been delayed by 18 months, a setback that will cost the company billions of dollars in compensation to airlines.

Sources close to Boeing said the American aerospace giant will admit that the revolutionary aircraft is unlikely to enter service until the end of 2009.

The Dreamliner has taken orders worth more than $150 billion (£76 billion). It was scheduled to enter commercial service next month but this initially slipped to early 2009 and has now been delayed again.

Boeing is also thought to be ready to postpone or even scrap one of the three variants of the aircraft to enable its engineers to focus on solving existing problems.

The likely victim will the 787-3, a high passenger density model designed for the Japanese market. The 787 is a radical new design because its fuselage is entirely made out of composite materials — essentially carbon fibre. Boeing has struggled to assemble the aircraft due to its complexity and it has yet to fly.

The delay will affect all airlines that have ordered the 787, including British Airways and Virgin Atlantic. The delay is particularly bad for BA as it means the British flag carrier might not get the aircraft in time for the 2012 Olympics. BA needs the 787 to increase capacity and reduce operating costs.

Airlines are likely to demand billions in compensation from Boeing and the company will also have to allocate huge resources to prevent the problems worsening. Its share price has already fallen 25 per cent since the 787 delays were first announced, wiping more than $18 billion from Boeing’s value. Senior executives are expected to face calls to resign. Doug McVitie, managing director of Arran Aerospace, the aviation industry analyst, said: “This is a massive blow to Boeing’s credibility because it is drip feeding bad news, which gives the impression it does not have a handle on the problems.”

Boeing said it would give an update on the programme today.

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