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The Health & Safety Executive (HSE) report, leaked to Computer Weekly, says that, at worst, the "majority of text used on the radar screens is on the limits of acceptability".
It also seeks improvements in the clarity of display screens used by air traffic "planner" controllers, who handle aircraft transferring between air space sectors.
Some of the HSE findings relate particularly to the clarity of text boxes that display a flight's progress to planner controllers.
The report contains an action plan that requires Nats to set out in writing how it proposes to address each of the items raised by HSE inspectors and to carry them out "within an appropriate timescale".
Failure to comply could lead to unlimited fines in the higher courts, but the HSE may decide to take no enforcement action at all.
A spokesman for Nats gave no assurance that the system would be changed, but said that the HSE report is being "studied thoroughly". He said that the required changes to the system are minor but the "implications of any knock-on effects" of modifying the system "need to be investigated". A working group has been set up to look into the issues, he said.
There is a dispute within Nats about whether the clarity of the screen displays is a safety issue or a matter of personal taste, ergonomics and user comfort.
Nats and its regulator, the Civil Aviation Authority (CAA), supported by the air traffic controllers' union, Prospect, insist that there is no safety issue.
They point out that the system was certified as safe before it went operational in January.
But some controllers called in the HSE, arguing that they could make mistakes in reading data on the screens. They believed the lack of clarity and small size of alphanumeric data could increase the risks of an accident for which they could then be unjustly blamed.
The controllers have sought a legal opinion on the safety of the system from a leading QC, Ian Croxford. His report criticised the CAA for approving the Swanwick system with "deficiencies".
Croxford said, "Users [air traffic controllers] readily and repeatedly have difficulty in reading the displays and, in particular, confuse the digits zero, six, eight and nine."
He added that complaints and comments about the clarity of screen displays "appear to have reached Nats and the CAA but did not result in any material change to the functioning of the displays".
Croxford's report also criticised Prospect for taking no "vigorous" steps to require Nats to improve the equipment.
It called on the union to take action to address the "perceived safety risk associated with the display screens at the New En Route Centre".
A spokesman for Prospect said the union was investigating the concerns of some of its members.
A Nats spokesman said there were bound to be issues with any major new system.