Objections from the UK nearly lost Bermuda a lucrative charter contract this summer, it has been claimed.

Tourism Minister David Allen said an initial rejection of a permit for an airline to fly to the Island 42 times, bringing nearly 8,000 people on holiday, nearly cost Bermuda dear.

He said the impact in terms of money lost, and more importantly reputation, could have been disastrous for the struggling tourism industry.

Mr. Allen highlighted the incident as an example of the UK using Bermuda as a "pawn'' in its dealings with other countries. And as a good reason for more freedom in the skies.

And he said there were several new airlines that were interested in flying to Bermuda, but were being held back because the UK Government had to approve every new service to the Island.

"We have our hands tied behind our backs because the UK has absolute veto over whatever we do,'' he said.

The charter company was due to start the service in May but had recieved a call from the UK, saying the permit for Mexicana airlines to fly the route had been turned down, he said.

The UK insisted that a British company should have a chance to compete for the route, from Philadelphia, and later suggested that a British airline may get more service between Mexico and the UK The situation had never occurred before said the Minister, and was averted after intervention from the Premier.

"This is colonialism. We were being treated with contempt. We were being held to ransom.

"We were faced with the good name of Bermuda being birsmirched.

"We must have freedom for charters because we are not getting the support from the scheduled carriers.''