BA tipped to be official 2012 Olympics airline

While no agreement has yet been reached, the national carrier is thought to be on the verge of becoming a "tier one" sponsor with an announcement due as early as next month.

The Standard understands that two other contenders for the airline category, Virgin and Emirates, are no longer in the running , although yet another airline could still trump BA. Budget airlines are thought unlikely to become official backers of the Games as they do not have sufficient marketing money.

The London Games organising committee, Locog, are eager to sign up an airline before the end of the year as they need to arrange more than 1,000 flights for Team GB athletes and officials to next summer's Beijing Olympics. These would be provided free as part of the deal.

Planes from the official 2012 airline will also be used to fly inspectors from the International Olympic Committee into London for their regular visits over the next five years.

The target cash value of any airline deal is not known, although the three existing 2012 partners - Lloyds TSB, EDF Energy and Adidas - have paid between £50m and £80m for the association.

In return, the official airline will be able to use the London Olympics logo on all its planes for the next five years. Strict rules on use of the Olympic rings mean that a modestsized logo will appear next to the cockpit and not be plastered over the tailfin.

Unlike the existing sponsors, the official airline will be able to use the London-logo abroad. Planes on runways in foreign airports are considered neutral territory in advertising terms - meaning they would be an exception to the Locog rule that advertisements can only be used in the UK.

Existing "tier one" backers have been given first refusal on Olympic tickets and the opportunity for their employees to become official volunteers during the Games.

If BA are confirmed as a 2012 sponsor, it would avert a potential public relations issue as so far two of the three deals have gone to foreign-owned firms.

The airline was a £1 million "premier partner" during the bid stage and provided free flights to Singapore for the 2012 vote in July 2005.

Last week BA announced it was spending almost £7 billion on a new fleet of A380 superjumbos. The doubledecker aircraft will come into service in 2012, the year of the London Olympics.

A BA spokesman said: "British Airways was one of the top sponsors of the London 2012 bid to bring the Olympic and Paralympic Games to London and was delighted when the bid team won the contest. We are always interested in such opportunities but no decision has been made on the airline's involvement with the Games in 2012."

A Locog spokeswoman said: "No deal has been done - the sponsorship category is still open." Locog aims to raise £625m of its target £2bn revenue from its commercial partners. The remainder will come from broadcast revenues, licensing and tickets. Last month Adidas became the official 2012 sportswear partner in a deal worth around £70m.