An emergency bridging loan of 100 billion yen (£680 million) from a state-backed bank dragged Japan Airlines (JAL), Asia’s biggest carrier, back from the brink of financial collapse.

The politically sensitive lifeline from the Development Bank of Japan is to finance debt payment and the purchase of new aircraft.

The loan is believed to have come in the nick of time. Private sector and government analysts believe that, until yesterday, JAL had sufficient cash to make it only to the end of this month.

Over the weekend, the company proposed a 44 per cent cut in pension benefits for JAL employees, although that plan might not win sufficient support to be implemented.

Seiji Maehara, the Japanese Transport Minister, said that JAL needed “drastic restructuring, a review of its routes, the replacement of ageing aircraft and a resolution to the pension issue”. He expressed only moderate confidence that JAL could be saved from bankruptcy, pointing to the huge political difficulties involved in dipping into the public purse to save a company that many Japanese view as a lost cause.

The loan was justified on the ground that the collapse of JAL would leave the domestic market serviced solely by All Nippon Airways, JAL’s only competitor.

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