MADRID, April 1, 2010 (AFP) - The signing of a merger agreement between British Airways and Iberia, initially planned for the first quarter, has been delayed for "technical issues," El Pais daily reported Thursday.

A BA spokesman told the newspaper that the delay was due to "technical issues that need to be resolved," without giving further details while an Iberia spokesman said the postponement "does not put the merger at risk."

Iberia could not be immediately contacted for further details.

The Spanish airline said after its last board meeting on March 25 that "nothing had been decided about" the planned merger and both companies were "still working on the deal."

In February, Iberia chairman Antonio Vazquez said there would be a deal within weeks and that the merger would be finalised before the end of the year.

The two airlines signed a preliminary deal last November after more than a year of negotiations but Iberia said at the time it would back out of the agreement if BA's giant pension deficit problem was not resolved.

A tie-up between Iberia and BA would create Europe's second-biggest airline by market capitalisation after Lufthansa, combining Iberia's strong presence in Latin America with BA's position in North America, Asia and Africa.

Under the terms of the preliminary agreement, BA will hold 55 percent of the new company and Iberia 45 percent.