Libra Holidays is poised to end uncertainty about its future by slashing capacity and unveiling a new management team and revised business plan.

Details of the rescue remain confidential, but the UK arm of Cyprus-based Libra Holidays Group will cut annual passenger numbers by more than two-thirds – from 160,00 this year to 50,000 next.

The downsizing will leave the UK operator one-fifth of its size last year, when it carried almost 250,000 passengers to Greece, Cyprus, Turkey and Egypt.

Rescue talks are close to completion – with debt payments rescheduled, a cash injection from investors outside the UK industry and a debt-for-equity swap with XL Leisure Group, whose XL Airways carries most Libra clients.

The UK company is likely to be separated from its Cyprus parent group.

The new management will present its plans to the Civil Aviation Authority next month.

XL Leisure Group was in talks with Libra last week. The CAA declined to comment, but is believed happy with the outcome.

A Libra spokeswoman said an announcement was due on the Cyprus Stock Exchange this week.