From MURRAY RITCHIE

European Editor

Brussels

MR John MacGregor, the Transport Secretary, last night led a British

assault on Belgian-inspired moves to bail out stricken European airlines

with state and EC subsidies.

Several European airlines are now in desperate trouble including Air

France, Aer Lingus, and Sabena of Belgium, and have joined a lobby for

government help.

At an informal meeting of Community Transport Ministers in Brussels,

Mr MacGregor responded to a Belgian Government suggestion -- reputedly

scripted by Sabena -- that EC funding be provided for a radical

restructuring of the entire community civil aviation industry.

Talk of such moves has produced sharp disapproval in the UK where the

Government boasts that British Airways resolved its financial problems

and returned to profitability through privatisation.

Some EC states say the British are exceptional because their airlines

benefit greatly from Heathrow and protected access to the lucrative

North Atlantic routes.

Mr MacGregor found allies in some, mainly charter, airlines who

complained that state subsidies for major national carriers would be

unfair and would merely increase capacity which is already surplus and

costly.

''I was quite pleasantly surprised at their attitude,'' the Minister

said. Mr MacGregor said the transport council would take note of the

industry's wishes and frame its policy accordingly.

Ministers will also study a major policy document expected from the EC

Commission which is studying aviation and its difficulties since the air

transport industry was liberalised.

Sabena is now losing money heavily and Air France has just announced a

huge redundancy programme. Aer Lingus, which is losing #1m a week, is

said to be all but bankrupt.

These and some other state airlines need government subsidies to

remain operating and the British do not oppose a temporary lifeline. But

Ministers oppose a return to large scale state aids, which would

increase over-capacity and defeat moves to increase competition and

reduce the cost of air travel within the Community.

Mr MacGregor said airlines were concerned at the ever-increasing cost

of regulations. While Britain accepted the need for costly safety and

environmental regulations, he said, there was room for reviewing other

areas where regulations, including social provisions, were sometimes

unnecessary.

''This is something we need to watch very carefully.'' he said.

The Minister was backed by a European Parliament study which came down

against the principle of state aids and condemned them as

anti-competitive.

Mr MacGregor quoted a British Airways policy document stating that it

was possible for airlines to do what BA had done and transform

themselves without state aids.

Mr Brian Cowen, the Irish Transport Minister, told the meeting that in

the long term there had to be some support for restructuring the

European air transport industry from member states and from the EC. The

Irish are currently awaiting EC Commission approval for an aid package

to Aer Lingus of #175m.