Airports in Cyprus were thrown into chaos on Friday in a wildcat strike by staff demanding jobs be safeguarded after the government privatized their operation.

Witnesses said thousands of passengers and 15 flights were grounded at Larnaca Airport, the island's main air terminal.

The strike was called off close to midnight Cyprus time (2100 GMT), with unions agreeing to a proposal by authorities on the level of compensation to individuals who would not be employed by the new operator.

However, an estimated 3,000 passengers were expected to endure several more hours of delays into the night before authorities can clear the growing backlog of travelers.

The unrest was triggered by the government signing an administration deal on Friday with the Hermes consortium of companies to develop and run the two airports, Larnaca and Paphos, for 25 years.

Witnesses said the Larnaca terminal was teeming with stranded tourists and huge traffic queues had piled up outside. Most of the striking staff were drivers and baggage handlers.

"There are thousands of people inside the air terminal, outside in the parking lot, sitting under trees and even on rubbish bags," said one witness.

There had been sporadic labor unrest at the airports during negotiations between the communications ministry and Hermes, which was short listed in an international tender competition.

The strike came in the midst of the island's tourist season, with many tourists among those stranded.

"This is very bad for the image of Cyprus as a tourist destination," a German visitor told reporters as she left the terminal building for her hotel, carrying only her hand luggage.

Hermes includes France's Bouygues Batiment and Ireland's Aer Rianta among its participants with a number of Cypriot companies. The signing of the contract had faced considerable delays because of legal objections lodged by other groups disqualified from the process.