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Qantas had taken the drastic step to ground all flights on Saturday, disrupting around 70,000 passengers and spurring the government and its labor-market regulator into action to seek an immediate end to hostilities between the airline and unions.

At the government's instigation, Australia's labor tribunal stepped in and ordered Qantas to resume flights and also banned trade unions, which have waged a long and damaging campaign of industrial action, from staging any more strikes.

Qantas CEO Alan Joyce, dubbed a "kamikaze" by a newspaper for effectively staging his own strike against the unions at the weekend, welcomed the tribunal's ruling, which gives both sides 21 days to settle the dispute or submit to binding arbitration.

"That was the only way we could bring that to a head," a bleary-eyed Qantas Chief Executive Alan Joyce told reporters on Monday as shares in the airline jumped 6 percent on the ruling.

Qantas says it has lost almost A$70 million since September from industrial action in its dispute with three trade unions over pay, working conditions and a plan to base more operations in Asia. Joyce had complained of "death by a thousand cuts" and said the future of the 90-year-old airline was at stake.

Qantas said flights were set to resume on Monday afternoon, on a limited schedule and subject to regulatory clearance. The airline hoped to return to normal in 24 hours.

Despite Qantas's share price rebound, the stock has lost more than a third of its value this year and investors worry about longer-term damage to the brand from the grounding, which disrupted the travel plans of some leaders at the end of a summit of Commonwealth nations in the western city of Perth.

"I will never ever even think of flying Qantas in the future. Happy, Alan Joyce?," said Robert Moore in a posting on the airline's Facebook page.

Qantas counters were still deserted at airports on Monday morning, but the mood on the street in downtown Sydney was also that Joyce may have overplayed his hand.

"It's a very Machiavellian move and it'll damage the reputation of Qantas. I don't think it necessarily had got to that stage yet, they could have still worked with the unions to get a better outcome," Michael Williams, a company director, said as he walked through the financial district.

PM FUMING

The government also welcomed the tribunal's ruling, which came in the early hours of Monday.

"We are pleased that after 24 hours of turmoil that common sense will be restored to the aviation and tourism sectors of Australia," Assistant Treasurer Bill Shorten said.

But with 108 aircraft grounded, almost 500 flights canceled and Australia's tourism image tarnished in a single weekend, Prime Minister Julia Gillard was left fuming at Qantas's tactic.

"I believe Qantas took an extreme approach on Saturday," Gillard told Channel Seven TV. "With very little notice to government or passengers, it grounded planes. It did that in circumstances where it had other options."

The dispute has dogged Qantas for months but it escalated recently when it announced plans to cut 1,000 jobs and order $9 billion worth of new aircraft as part of a makeover to salvage its loss-making international business.

The airline made a pre-tax profit of $552 million in the year to June 30.

Union representatives said they would work with Qantas to resume flights as soon as possible but some sought to cast Joyce as a reckless manager prepared to risk the airline.

"The board should immediately sack their out-of-control CEO," said Captain Richard Woodward, vice president of the Australian and International Pilots Association. He described Joyce's behavior as "megalomaniacal."

Qantas carries about a fifth of Australia's international passengers and, according to Joyce, the weekend grounding of the fleet cost the airline about A$20 million each day.

MASSIVE DISRUPTION

The labor tribunal had deliberated for more than 12 hours as lawyers for the airline, union and government questioned executives and advisers made submissions.

Qantas said a series of rolling stoppages by unions had cost the airline almost A$70 million since September and driven down bookings, threatening its survival.

The Qantas dispute is the latest in a tide of industrial unrest as unions press for a greater share of profits amid tight labor markets and high commodity prices.

It had threatened to become the most significant disruption to Australian aviation since a six-month 1989 dispute forced the government to use the airforce to keep flights running. Strikes by engineers cost Qantas around A$130 million in 2008.

Qantas airline, which usually flies more than 60,000 people a day, has been paying for accommodation and expenses for stranded travellers over the weekend and arranging on alternative flights.

Australian rival Virgin Australia said earlier it was adding 3,000 seats on its domestic network on Monday, in addition to 3,500 seats on Sunday.

Virgin Australia's airline partners Abu Dhabi's Etihad Airways and Air New Zealand said they were looking at options to increase capacity to and within Australia.

Qantas' decision left many passengers venting their anger after they were stranded in 22 cities around the globe.

The weekend was one of Australia's busiest for travel, with tens of thousands traveling to the hugely popular Melbourne Cup horse race on Tuesday.

(Additional reporting by Narayanan Somasundaram, Amy Pyett and Ed Davies in SYDNEY and James Grubel in CANBERRA; Editing by Mark Bendeich)

A number of interested parties were considering several possible deals, including buying all or parts of the troubled U.S. futures brokerage run by former Goldman executive Jon Corzine, said the source, who requested anonymity.

"The goal is squarely for some sort of M&A transaction," the source said, adding the situation was "fluid".

The pressure is on the company after a week in which it posted a quarterly loss, its shares fell by two-thirds and its credit ratings were cut to junk. MF Global hired Evercore to help find a buyer, separate sources said this past week.

It was unclear how close the company was to a possible deal as discussions stretched through the weekend. MF Global declined to comment.

Since Corzine became chief executive last year, the brokerage has increasingly used its own capital to trade.

MF Global's problems are now rooted in low interest rates and bets made on European sovereign debt, and it is emerging as one of the hardest-hit U.S. financial firms in the fallout from Europe's economic crisis.

The company has reached out to banks including Barclays Plc, Citigroup Inc, Deutsche Bank, Jefferies Group Inc, JPMorgan Chase & Co, Macquarie Group Ltd, State Street Corp and Wells Fargo, a source familiar with the situation said on Friday.

The plunge last week in MF Global's corporate bonds to distressed levels, and in its shares to below $1 at one point on Friday, makes it all the more urgent for the company to come up with some sort of solution before markets open on Monday.

The company, which runs a Futures Commission Merchant and a broker-dealer, was scrambling last week to reassure customers about its stability as signs grew that some of them were withdrawing money.

A drop in a broker's credit rating to junk erodes confidence in its creditworthiness and can then restrict its ability to borrow -- the bedrock of any financial institution -- and fund day-to-day operations.

Corzine took the reins at MF Global after a term as governor of New Jersey.

(Additional reporting by Paritosh Bansal; Editing by Dale Hudson)

Deep concern persists that European leaders will fall short when they try to flesh out the details of how their rescue fund can tap sufficient resources to backstop Greece and to handle a potential government financing crisis in Italy or Spain.

Europe is looking to emerging economies to provide the extra financial firepower to strengthen the fund four- to five-fold, to about 1 trillion euros, a promise that could materialize at a Group of 20 summit in France on Thursday and Friday.

The response so far from China on strengthening the fund has been very cautious, and market experts want to see a fund with resources twice the size under discussion in Brussels. That has set the stage for possible unsettling disappointment in the days ahead.

"If the absolute amount is not enough, we will be back to the storms. The break in the clouds may only last a few hours," said Ellen Zentner, senior U.S. economist at UBS.

Stronger-than-expected U.S. corporate earnings last week and third-quarter U.S. growth at a solid 2.5 percent, underpinned by surging business investment and a pick-up in consumer spending, have buoyed prospects for the global economy.

The drawdown in inventories in the third quarter also points to solid U.S. growth continuing through the end of the year.

Several Wall Street firms revised up their outlooks. JP Morgan raised its fourth-quarter economic growth forecast to 2.5 percent from 1 percent.

But talk to any economist or market strategist and every positive statement about the economic outlook is heavily hedged with warnings about what could yet go wrong.

The list is long.

Europe probably is already in recession; its politicians could fail to build a strong enough firewall in time to prevent financial contagion; and U.S. consumers are too heavily indebted to support strong growth next year.

Looming in the background are the U.S. budget deficit talks. Risks persist that lawmakers will reach stalemate by the end of the year, which would automatically trigger U.S. fiscal contraction at the start of 2012 if tax cuts and jobless benefits expire.

"The politics are improving in Europe, but the economic data is deteriorating and recession risks are rising. In the United States it is the exact opposite," said Kurt Karl, senior vice president at Swiss Re American Holdings Corp.

Any of these factors could put the brakes on recovery.

FUTURE ACTION

The European Central Bank is widely expected to lay the foundation for an interest rate cut at its meeting on Thursday, citing the economic weakness in the 17-nation currency bloc. Euro zone manufacturing and services data due on Wednesday may confirm the tilt into recession seen in flash PMIs last week.

The ECB probably will also signal it will continue to purchase bonds issued by debt-heavy euro zone countries to promote financial stability, a move that gives leaders more time to finalize details of the debt plan.

Most analysts doubt Italian Mario Draghi will embark on bolder action at his first meeting as ECB president, although there is an outside chance for a rate cut.

Federal Reserve policymakers also are expected to tread cautiously at their meeting on Tuesday and Wednesday.

The improved U.S. data diminish the argument for further monetary easing, though Fed Chairman Ben Bernanke at his news conference on Wednesday is likely to repeat his disappointment at the pace of recovery and explore further options for supporting growth in face of the considerable risks ahead.

Several Fed policymakers have suggested the central bank needs to do more to support housing, the central problem for the U.S. economy.

Employment growth is stuck in a rut and consumers are digging into their savings to spend. As long as the American consumer, who drives 70 percent of all U.S. economic activity, is buried under a mountain of debt -- much of it mortgage debt -- and many houses remain worth less than the mortgage, consumer demand will remain weak and business hiring paltry.

Employment data on Friday is expected to show 95,000 new jobs outside the farm sector were added in October, a slight improvement from the prior month. But payroll growth since April has averaged only 72,000, less than one-third the pace needed to reduce the 9.1 percent jobless rate, and down from a 161,000 average rate in the prior seven months.

Income growth is negative once adjusted for inflation, and household debt loads at 133 percent of disposable income are too high to support much consumption.

"The underlying problem is to find where sustainable spending growth will come from," said David Mann, U.S. economist for Standard Chartered.

Europe in recessionary territory and an impaired U.S. consumer also point to a deceleration in exports from China when its manufacturing index is released on Tuesday, rounding out a picture of a vulnerable world economy.

(Editing by Dan Grebler)

The head of Europe's rescue fund sought to entice China on Saturday to invest in the facility by saying investors may be protected against a fifth of initial losses and that bonds could eventually be sold in yuan if Beijing desires.

Though China has expressed confidence that Europe can survive its crisis, it has made no public offer to buy more European government debt.

Xinhua, in an English-language commentary, said China could not stand by while its largest trading partner foundered.

"Beijing's good-will gesture is a good response to those who see China as a threatening rival to Europe. Despite differences in politics, economy and culture, China and the EU are still good friends and partners," it wrote.

"However, amid such an unprecedented crisis in Europe, China can neither take up the role as a savior to the Europeans, nor provide a 'cure' for the European malaise," Xinhua added.

"Obviously, it is up to the European countries themselves to tackle their financial problems. But China can do within its capacity to help as a friend."

Such commentaries offer an insight into government thinking, even if they do not reflect official policy.

China's pile of $3.2 trillion in foreign exchange reserves, the biggest in the world, keeps growing thanks to trade surpluses and capital inflows.

Analysts estimate that China holds about a quarter of its foreign exchange in euro assets and there are few other places for it to park investments of such a scale.

The government has said it has confidence in the euro and in the European Union's efforts to tackle the crisis. But comments from Chinese economists and in state media have also revealed anxieties about the security of euro assets.

Expanding the European Financial Stability Facility (EFSF) to 1 trillion euros is key to the euro zone's latest anti-crisis plan, put together at a Eurozone summit last week.

Details on how this would be done have yet to be finalized and European leaders are under pressure to show the plan will work.

Xinhua said Europe needed to make "more concerted efforts".

The G20 summit in Cannes next month should accord China the respect it deserves, the commentary added.

"It is advisable that at the summit European leaders take heed of the voices of emerging economies, whose remarkable contribution to world economic recovery and growth deserves better understanding and reciprocal treatment."

(Reporting by Ben Blanchard; Editing by Ron Popeski)

Qantas said it had canceled 447 flights affecting more than 68,000 passengers since grounding over 100 aircraft around the world on Saturday.

The airline is seeking to bring to a head a prolonged and increasingly bitter battle with its unions over pay, working conditions and plans to set up two new airlines in Asia.

Qantas plans to cut 1,000 jobs and order $9 billion of new Airbus aircraft as part of a makeover to salvage its loss-making international business.

The abrupt escalation in the dispute angered the government and came as an embarrassment for Prime Minister Julia Gillard, who was hosting a summit of Commonwealth leaders in the western city of Perth, 17 of them booked to fly out on Sunday with Qantas.

"There is no case for this radical overreaction," Assistant Treasurer and former senior union official Bill Shorten told the Australia Broadcasting Corp.

"Sixty-eight thousand Australians and the tourism industry has been grossly inconvenienced by this high-handed ambush of the passenger."

Gillard, criticized for not intervening earlier in the dispute, said the tribunal hearing in Melbourne was needed to quickly resolve the impasse.

"We took this action because we were concerned about the damage to the economy," she told reporters in Perth.

"The government is arguing for an end to the industrial action," she said, adding that most leaders had made alternate flight plans.

BOLD, UNBELIEVABLE DECISION

Qantas chief executive Alan Joyce estimated the "bold decision, an unbelievable decision" to lock out workers and ground the fleet would cost the company A$20 million ($21.4 million) a day.

He said the special labor tribunal, which reconvened after a late-night meeting on Saturday, would have to terminate all industrial action before the airline could resume flying.

"We're hoping a determination is made today and that will give us certainty about what we can do and start planning to get the airline back in the air," Joyce told Australia's Sky News.

He indicated Qantas could be flying again on Monday if the Fair Work Australia tribunal ordered the termination of industrial action on Sunday.

Qantas and the unions would then have 21 days to negotiate a settlement before binding arbitration would be imposed.

The lockout is the latest in a rising tide of industrial unrest in Australia as unions increase pressure for a greater share of profits amid tight labor markets and a boom in resource prices.

It threatens to become the most significant disruption to Australian aviation since a dispute in 1989 that lasted for six months and had a significant impact on tourism and other business. Industrial action by engineers cost Qantas around A$130 million in 2008.

Qantas faced angry shareholders and workers at a shareholders' meeting on Friday when the company said the labor dispute since September had caused a dive in forward bookings and was costing it A$15 million a week.

The shareholders backed hefty pay rises to senior Qantas executives, including a A$5 million package for Joyce.

The action sparked an angry response from Australia's Transport Minister Anthony Albanese on Saturday.

"I'm extremely disappointed. What's more, I indicated very clearly to Mr Joyce that I was disturbed by the fact that we've had a number of discussions and at no stage has Mr Joyce indicated to me that this was an action under consideration," he said.

Tony Sheldon of the Transport Workers Union said the lockout was cynical and pre-planned.

"It's a company strategy that shareholders should have been told about, that the Australian community should have been told about, not ambushed in the dead of night," he said.

The Australian and International Pilots Association (AIPA) was flabbergasted at the move to ground the fleet, describing it as "brinkmanship in the extreme".

"Alan Joyce is holding a knife to the nation's throat," said Richard Woodward, vice-president of AIPA.

MASSIVE DISRUPTIONS

Qantas check-in desks across Australia were empty on Sunday morning as customers scrambled for alternative travel arrangements. The airline usually flies more than 60,000 people a day.

Australian rival Virgin Blue said it was adding an extra 3,000 seats on its domestic network on Sunday to assist Qantas passengers.

Qantas's decision left many passengers venting their anger after they were stranded in 22 cities around the globe.

"To resolve this at the expense of paying customers on one of the biggest flying days in Australia is quite frankly ... bizarre, unwarranted and unfair to the loyal customers that Australia has," a businessman, who gave his name only as Barry, told Sky TV at Melbourne airport.

This weekend is one of Australia's busiest for travel, with tens of thousands traveling to the hugely popular Melbourne Cup horse race on Tuesday, dubbed "the race that stops the nation".

Shares in the airline have fallen almost 40 percent this year, underperforming the 8 percent fall in the benchmark index.

($1 = 0.933 Australian Dollars)

(Additional reporting by Narayanan Somasundaram and Ed Davies in SYDNEY, Rebekah Kebede and Michael Perry in PERTH, James Grubel in CANBERRA; Writing by Lincoln Feast; Editing by Jonathan Thatcher)