An agreement by a consortium to buy Flybe has been signed by the struggling regional airline.

The Connect Airways consortium includes Virgin Atlantic, Stobart Group and investment firm Cyrus Capital.

Flybe's assets are now owned by Connect Airways and flights will operate as normal.

A rival rescue bid was tabled last week from investors including US airline Mesa Air Group and backed by former Stobart boss Andrew Tinkler, who owns shares in Flybe.

But Flybe said it did not believe the proposal would not be completed in a timeframe which would allow it to continue trading.

It added the Connect Airways consortium was the "only viable option available".

The Mesa consortium is reportedly proposing to make a capital injection of £65 million at 4.5p a share.

Under the terms of the Connect deal, the buyers will pay £2.8 million to take control of the main trading company Flybe and the online arm

It will later complete the purchase of the wider holding company for 1p a share.

Connect has also committed to make available a £20 million bridge facility to support Flybe's working capital and operational requirements.

It also intends to provide up to £80 million of further funding.

The takeover has attracted controversy, as its biggest shareholder Hosking Partners, objected to the deal and ordered an inquiry. It also moved to oust Flybe's chairman Simon Laffin, but the firm said it had full confidence in him.