Lufthansa will take full control of BMI British Midland by buying a 20 per cent stake from Scandinavian carrier SAS, a move that will give the German carrier freedom to decide the fate of its Heathrow subsidiary.

Europe’s largest airline will pay SAS £38m (€42m), half for the stake and the other half for SAS relinquishing rights codified in a shareholder agreement in 1999, both airlines said without giving further details.