Passengers were stranded at Gatwick this morning after Copenhagen-based low-cost carrier Sterling Airlines became the latest airline to file for bankruptcy.

However, a Gatwick spokeswoman denied up to 700 were left at the airport as reported by the BBC and Press Association. Most passengers failed to show up for the three early-morning Sterling departures.

Thousands of passengers were stranded across Europe, with an unknown number of UK passengers abroad.

Sterling operated a fleet of 27 aircraft to 40 destinations, flying from Gatwick to Copenhagen, Stockholm and Billund, the original home of Legoland. It also operated from East Midlands and Edinburgh airports during the summer.

The Civil Aviaition Authority believes few UK passengers had purchased tickets through travel agents or tour operators, so most will not enjoy the financial protection offered by the travel trade.

In a statement, Sterling said passengers who booked direct will not be refunded and those abroad will have to buy a flight home, although they may continue their holiday if in a hotel booked with a Sterling partner company.

The airline is owned by an Icelandic company and blamed the financial meltdown in Iceland for the failure. However, problems had been mounting throughout the year, with high fuel costs and stagnating demand. About 30 airlines have failed so far this year.