In the latest twist to the Cyprus Airways (CY) saga, pilots have threatened possible strike action that could cripple the airline at one of its most sensitive moments.

The move comes just as a delegation heads out to Brussels to present the plan to the European Commission, which needs to approve the blueprint before releasing a badly needed ?58 million loan.

The cash-strapped company is incurring losses of ?2-3 million a month.

The restructuring plan, which envisages across-the-board pay cuts and layoffs, was grudgingly agreed to by all of the airline's unions earlier this month after harsh negotiations with CY's management.

But pilots union PASYPI is now charging management of backtracking on the deal. They say they have received word that the salary cutbacks ? ranging from 5 to 25 per cent ? also apply to them, contrary to what was agreed.

"They [the company] are reverting to the initial version of the plan. This was not our understanding. They're trying to con us," PASYPI head Polys Economou told the Sunday Mail yesterday.

To back up his argument, Economou said management had secretly invited four senior captains to headquarters this week to make them "a special offer".

He explained that the compensation package for those opting to leave is costing the airline some ?50,000 a day.

"It seems it has dawned on the company that, in hindsight, it cannot sustain this cost. They therefore tried to lure four pilots, who had agreed to becoming redundant, to be rehired at a different position. They're offering them reduced salaries but hinted they'd make up for this by giving them money under the table in the form of increased allowances.

"They've botched things and now they're resorting to these machinations to save money. This is entirely irregular, not to mention illegal. They're bypassing normal recruitment procedures. We shall not stand for this," he warned.

"This is rusfeti (nepotism) taken to a whole new level. It is a scandal of the highest order."

Economou's serious allegations were rebutted by Communications Minister Harris Thrasou, who questioned the pilots' motives.

Thrasou told the Mail yesterday he had received assurances from CY chairman Lazaros Savvides that no separate arrangements were made with the pilots as part of the restructuring plan.

"We made it very clear from the outset that no one would receive preferential treatment. The cutbacks cover all the employees without exception. I therefore cannot understand what they are doing now."

Asked what the government would do if the pilots went ahead with a strike, Thrasou seemed undaunted.

"We'll take things one at a time. Right now our priority is to convince the EU that the restructuring plan will make the airline viable."

Thrasou and Finance Minister Michalis Sarris will today be flying to Brussels to meet with EU officials. CY chairman Lazaros Savvides, already in the Belgian capital, will also be attending the crucial deliberations. They're due back on Tuesday.

Meanwhile PASYPI will be convening its general assembly tomorrow to decide its reaction to the alleged U-turn by the company.

"Our primary aim is to show that management lacks credibility. We are contemplating various measures,"commented Economou.

He did not rule out that PASYPI might demand the resignation of CY's board of directors, which he accused of not taking into account the airline's best interests.

"A strike will be the last resort. Believe me, we would not like to take matters to the extreme."