Sabena, Belgium's troubled airline, is today expected to ground all flights as the company is poised to become the first European flag carrier to file for bankruptcy.

But talks with Sir Richard Branson's Virgin Express are set to continue as Belgium tries to salvage as much of the airline as is permissible under European Union law. "We stand ready to help," said Mr Will Whitehorn, corporate affairs director of the Virgin Group.

Belgium's inner cabinet is understood to have decided yesterday that bankruptcy was the only viable option left for Sabena, in which the state holds 50.5 per cent. Flights are set to be grounded for 36 hours from this evening to mark the demise of the firm and distinguish it from attempts to build a new airline around the Sabena subsidiary, DAT.

The move is timed to coincide with a meeting of the Sabena board, which is expected to apply for bankruptcy. Sabena is under protection from creditors, and management hopes the court overseeing the firm will not wait over a day before declaring it bankrupt.

That should open the way for negotiations with Virgin Express, Sir Richard's Brussels-listed carrier, over taking assets in DAT, a legally separate entity.

Sabena operates no flights from Dublin to Brussels, but sells tickets for flights operated by Aer Lingus under a code sharing agreement. Aer Lingus will continue to operate the Brussels service and will announce today if it will honour Sabena tickets for travel from tomorrow onwards.