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The dead, who included a two-year-old child and 47 Britons, were on board a Spanish Airlines DC9 from Palma, Majorca to London.
The DC9 was in collision with a Spanish chartered Coronado 990 aircraft 27,000 feet (8,230m) above Nantes, in western France.
Eye-witnesses say the DC9 exploded and broke up in mid-air following the collision.
Max Chevalier, British Honorary vice-consul at Nantes, said: "Suddenly a streak of red light appeared and part of the aircraft came down with bodies flying out. It was a horrible sight."
The pilot of the Coronado, Captain Antonio Arenas-Rodriguez, was able to land his damaged aircraft safely at a military airfield in Cognac. All 108 people on board escaped injury.
A passenger on board the Coronado aircraft, Leonard Wareham, 59, who lives in Madrid, said: "We were sitting on the port side of the aircraft; my wife had the window seat. There was an enormous bump and then everything seemed to fall about.
"No-one knew what was happening except that the aircraft was falling fast.
"The next thing I noticed was that a French fighter plane was flying around us and evidently he guided us in to land."
At least 16 airlines, including British European Airlines (BEA) and Caledonian, cancelled flights over France following news of the accident.
Members of the French Civilian Air Controllers Association (SNCTA), have been on strike illegally since 20 February to gain improved pension benefits and obtain the right to strike which was outlawed for air traffic controllers in 1964.
Military air traffic controllers have been operating France's air control system since 26 February.
Thirty-nine British holidaymakers returning from a winter holiday in Minorca who missed the ill-fated flight by half-an-hour, flew into London last night.
Since January 1972, 340 people have been killed in accidents involving Spanish aircraft.
The Queen has sent a message of sympathy to Michael Heseltine, Minister for Aerospace.
At a news conference held within 24-hours of the accident, the French Minister of Transport, Robert Galley, denied any link between the accident and the striking air traffic controllers.
General Claude Grigaud, chief of staff of the French Air Force which had been controlling France's air space during the strike, said initial investigations suggested pilot error was to blame.
General Grigaud said Captain Arenas-Rodriguez had failed to obey an order to slow down and had made a 360 degree turn "without warning"
Most of the world's airlines boycotted France's air space for at least a week following the accident, costing Air France approximately £1m per day.
The air traffic controllers' strike ended on 21 March 1973 without resolution largely due to the huge financial impact the strike was having on the industry.
Seven air traffic controllers, accused of leading the strike action were dismissed from their jobs by the Minister of Transport.
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