Virgin Atlantic Airways , the airline owned by British entrepreneur Mr Richard Branson, has stepped up its rivalry with British Airways by unveiling a new livery and offering beds for business class users.

Mr Branson said the changes were part of a £40 million sterling spending plan by Virgin on new products and services, aimed at eclipsing BA's new product plans announced last month.

Last month, BA announced it was introducing flat sleeper beds for its long-haul business class passengers but Mr Branson challenged his bigger rival to actually deliver the goods on its fleet of 113 long-haul aircraft.

Mr Branson said the Virgin double beds would be in place on his main fleet by the end of next year. Virgin would also have single beds and they will be introduced from the end of 1999. Virgin also targeted BA in the introduction of its new livery, which includes the Union Jack flag, which would feature on each of its Boeing 747-400 wings and on the winglets and fuselage.