Fears have grown that United Airlines will be unable to escape bankruptcy, after staff at the US's second biggest carrier rejected a cost-cutting rescue package.

United urged its staff, which own 55% of the carrier, to back cuts totalling $1.5bn a year in the firm's wage bill.

In all, United wants to cut $9bn in costs over six years.

We believe UAL has a 75-80% or greater risk of filing for bankruptcy

CSFB analyst

But the proposal failed to impress two big unions, raising fears that United bosses would be unable to meet a 15 September deadline they have set themselves to negotiate a deal with employees.

The impasse raised fears in Wall Street that United would be forced to follow through with a threat made two weeks ago that it would file for bankruptcy unless it won agreements to slash its outgoings.

"Barring significant progress in the coming weeks that we simply do not believe is forthcoming, we continue to believe UAL has a 75-80% or greater risk of filing for [bankruptcy] protection," James Higgins, an analyst at Credit Suisse First Boston, said.

'Wholly unacceptable'

The wage cuts, part of a drive to cut $2.5bn in annual costs, involve reductions of about 10% in salaries to unionised mechanics and customer services workers.

But machinists said they would not discuss the proposals until United installed a new chief executive.

The scope and magnitude [of the proposed cuts] boggles our mind

Pilots' association

Interim chief Jack Creighton is due to step down once a successor is found.

And pilots, regarded as a moderate sector of the United workforce, rejected the proposals immediately, branding them "totally and wholly unacceptable".

"The scope and magnitude", of the package "boggles our mind", said Steve Dereby , spokesman for the Air Line Pilots Association.

The airline was asking pilots to accept a pay cut of "much higher" than 20%, Mr Dereby added, while declining to detail the proposal.

Fight goes on

United has, like many other US airlines, been hit by the lingering impact of the 11 September attacks, which saw passenger numbers slump.

"The world has changed," Mr Creighton said two weeks ago.

"Revenue isn't coming back the way the industry expected. Demand isn't returning, fares remain low, and the industry is grappling with how to respond."

While the US government has set up an emergency fund to support airlines through the downturn, United, seeking $1.8bn in federal loan guarantees, is thought to have failed to persuade officials it was doing enough to help itself out of trouble.

The airline's parent company, UAL, said efforts would continue to persuade staff of the need for the cost cuts.

A UAL spokesman said: "We still plan to work with the pilots and all of our employee groups, because as we said earlier, we really have two paths we can take.

"One is to reduce our costs. The other, of course, is a possible Chapter 11 filing."