The entire workforce of a battling Luton airline is to be made redundant.

Silverjet workers were told given the bad news after a buy-out for the business class-only flyer fell apart.

The announcement comes only days after administrators Begbies Traynor said a buyer had been found to take over the airline as a going concern.

Begbies Traynor's Mark Fry said: "On June 10 we announced that principal terms had been agreed with Kingplace Ltd to acquire and relaunch Silverjet, subject to regulatory approval and contractual completion.

"We now understand that, as a result of the unusually complex negotiations with third parties, Kingplace is no longer in a position to acquire Silverjet as a going concern. As a consequence, we have today had to make the entire workforce formally redundant, in line with our legal obligations as administrator.

"We are extremely disappointed to have had to make these redundancies, which we had been working hard to prevent.

"We continue to negotiate the sale of Silverjet's assets for the benefit of the company's creditors and will provide an update as soon as we are able."

The bombshell announcement is the latest twist in a saga that has seen the airline seemingly brought back from the dead on several occassions.

Silverjet went into administration at the end of May after a promised cash injection of £2.5 million failed to materialise.

The airline, which only began operations in January 2007, was severely damaged by rising fuel costs and an economic down-turn and follows its two main London to New York rivals, Eos and Maxjet, into the history books.