Lufthansa, the German airline, is poised to take control of bmi, the British carrier.

Lufthansa yesterday made clear that it was determined to exercise an option to take majority control of bmi, formerly British Midland, which is controlled by Sir Michael Bishop.

However, if Lufthansa decided to sell on its stake, it could spark a bidding war between British Airways and Virgin Atlantic, which is controlled by Sir Richard Branson.

BA and Virgin have previously expressed interest in acquiring bmi, with Willie Walsh, the BA chief executive, saying only last month that he was very interested in the airline’s future.

Stephan Gemkow, Lufthansa’s chief financial officer, told journalists yesterday: “There is an option that enables us to acquire a majority stake in bmi.” He added: “We are determined to use that option.”

Mr Gemkow said that there was “no need to hold talks” with bmi.

Lufthansa holds a stake of 30 per cent minus one share in bmi, Sir Michael holds 50 per cent plus one share, and SAS, the Scandinavian airline, holds the remaining 20 per cent.

Sir Michael has a “put” option to sell his stake in the company, and Lufthansa holds a “call” option to buy him out between December 2008 and June 2009.

Sir Richard recently held talks with Dubai International Capital (DIC), the £6 billion sovereign wealth fund, about funding a possible takeover bid for bmi. He is understood to have joined senior executives from Virgin Group when they visited Dubai recently to discuss potential deals including a joint £750 million bid for bmi.

Sir Michael is expected to put his stake up for sale this year, although he says he is under no pressure to do so.

Alternatively, there are rumours that Lufthansa and Virgin may cooperate to buy bmi and create a European super-carrier. Virgin is interested in bmi because it would bring passengers from across Europe to its base at Heathrow, allowing them to transfer to long-haul Virgin flights.

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