The British Government has objected to Bermuda putting Russian planes on its aircraft registry claiming it is a "revenue-raising business", the Premier revealed yesterday.

But Ewart Brown said he would be raising the issue with the Russian authorities when he visits the country next week and would be holding talks with the Governor about the situation he said was of "great concern to us".

He did admit that it was a "significant revenue earner, in the millions" but said Bermuda registration was highly regarded by the world's airplane industry and that Government held the view that the UK was acting unjustifiably.

Dr. Brown said in 1999 the Bermuda Department of Civil Aviation, under the authority of an "entrustment' from the UK, entered into an agreement with the Russian Aviation Authority to "undertake certain safety regulatory oversight functions" of aircraft registered in Bermuda and operated under lease by Russian airlines.

Dr Brown added: "The Department of Transport claims that it is not clear how problems are addressed and which responsibilities are transferred under the agreement and which remain in Bermuda. The UK Government has advised us that, in their opinion, 'Bermuda is conducting a revenue-raising business' and the Department would find it hard to accept the ongoing operation of the register in its current form at all."

The Premier pointed to 11 reasons why the Island was highly regarded in the international aircraft leasing business including the fact that Bermuda and Russia have both been assessed by the United States Federal Aviation Administration (FAA) as 'Category 1' states where the civil aviation authority licences and oversees that air carriers operate in accordance with international aviation safety standards.

He continued: "The Aviation Working Group (AWG), comprising the world's major aviation manufacturers, leasing companies and financial institutions state that 'Bermuda registration has become a main element of aircraft leasing and financing for certain types of international transactions.

"This is the case in large part given the high quality and professionalism of the registry, its personnel and its administration as well as the sound policies and practices of the registry'."

Dr. Brown said as well as making Bermuda's legal community aware of the situation, they would also make the UK's position known to the AWG.

"We hold the view that the United Kingdom is unjustifiably attempting to use certain technical aviation factors to adversely affect the viability and reputation of the Bermuda Aircraft Register and we will vigorously oppose these efforts.

"It is a significant revenue earner, in the millions. Overseas territories for the most part are struggling economically and we need all the revenue we can get. For something that we have operated without a hitch for 11 years to now be threatened is of great concern to us."