BA's pensions deficit totals �2.1bn

The proposal comes after talks with trade union officials on how to tackle BA's �2.1bn pensions deficit.

Unions warned there were still "substantial differences" over plans, but agreed to hold further talks.

BA's proposal for a standard retirement age of 65 - increased from 55 for air crew and from 60 for ground staff - caused contention at the firm.

The retirement age for pilots had been upped to 60 from 55.

As well as the concession the airline has also offered to increase its annual pension fund contribution from �235m to �272m.

Contribution hike

"We recognise that normal retirement age was a sticking point and we have put forward an option that allows staff to retire at 60," said BA's chief financial officer Keith Williams.

"Staff can still choose not to pay any extra but it will mean working longer to get the same pension."

We could have had a deal today but BA did not move far enough Jim McAuslan British Airline Pilots Association

For ground staff, contributions would rise from 5.25% to 10% and for air crew from 6.5% to 11.25%. After five years, the rates would be harmonised at 10% for all staff.

Earlier BA announced it planned to increase its planned one-off cash injection by an extra �300m to �800m.

It has also offered to pay up to �50m a year for the next three years if staff accepted future benefit changes.

BA's proposals, which represent a decade-long funding plan, have already been agreed by the pension fund's trustees.

Transport and General Workers Union national officer, Brendan Gold, acknowledged that BA had made concessions but stressed that clear differences still existed - especially over the retirement age for cabin crew.

Amicus, which represents thousands of BA staff, said that the meeting had been constructive - and that it would meet the firm again after consulting members.

"We have asked the company to revisit a number of items relating to the benefit changes," said lead Officer Brian Boyd

"Amicus still believes there should be more funding available from BA to reduce the cost burden on employees."

General secretary of the British Airline Pilots Association, Jim McAuslan added: "We could have had a deal today but BA did not move far enough.

"If they are not careful they will snatch defeat from the jaws of victory. We remain resolute."