In a surprise on Monday, the European Union put its scheme on hold for a year after the UN agency, the International Civil Aviation Organization ICAO.L, agreed to set up a committee to work through difficult political issues such as how to deal fairly with developing nations.

"Given the opposition of a wide majority of countries, (the EU scheme) was a source of concern for us," ICAO Secretary General Raymond Benjamin said.

But Benjamin could not rule out further delays in his agency's push to come up with a global plan to reduce the airline industry's environmental impact.

Benjamin said in June that he believed the agency would narrow down the three "market-based measures" still being considered and put its weight behind a single option by March 2013.

But on Thursday he said he could not guarantee that this would happen before next fall's ICAO general assembly in Montreal.

"I cannot pre-empt the progress which will be made," he said, noting that previous resolutions only require that he determine whether establishing such a scheme is "feasible."

The EU has been under pressure to scrap its law, which requires all airlines using European airports to pay for carbon emitted during flights to and from the continent. Opponents say the rule violates the sovereignty of non-EU states.

On Tuesday, the U.S. House of Representatives voted to bar airlines from complying with the EU law.

The European Commission - the EU's executive - has long said that if ICAO comes up with a robust global framework to limit emissions, it could modify its own law, known as the Emissions Trading Scheme. That would very likely resolve the conflict.

On Monday, EU Climate Commissioner Connie Hedegaard still had strong words for ICAO: "If this exercise does not deliver - and I hope it does - then needless to say we are back to where we are today with the EU ETS - automatically."

Diplomats and technical advisers at ICAO are evaluating a variety of market-based options - including a cap and trade system - for controlling aviation emissions. The two other options still in contention are global carbon offsetting and offsetting with a revenue-generating mechanism.

At the same time, ICAO is working on a "framework" that lays out how any market-based measure should be implemented - for example, how to account for emissions released over international territory, and how to address developing countries' fears that any scheme could hold back growth.

The framework - which Benjamin said must be ready in time for the assembly - is something that could apply to a variety of different mechanisms, and local or regional systems like EU ETS itself as well as any global scheme.

Benjamin said he did not want to speculate on what it would take to satisfy the EU. He noted that six months ago, it seemed that the EU would start fining airlines who did not pay into its scheme by April 2013.

"Now, six months later, this is not the situation," he said.

"I will not start guessing what will be the position of the European Union in September, October of 2013." (Editing by Frank McGurty; and Peter Galloway)

• A Permanent Economic Emergency