It is not surprising that the partnership with BMI and Virgin Atlantic is coming to an end on August 31st, 2012 as most of BMI’s flights are transitioning to British Airways, a bitter rival of Virgin Atlantic. The operations of the BMI are slowly winding down.
Virgin Atlantic just updated their partner page to include information about the ending of the partnership. You can no longer book awards on BMI using Flying Club miles past the August 31st. All existing award and paid tickets will be honored past September 1st, however.
From September 1st onwards you can no longer collect Virgin Atlantic Flying Club miles on BMI flights.
There has been no communication from BMI about their partnership with Virgin Atlantic, but it is probably ending on August 31st, 2012 as well. It is unclear, however, if you can still book Virgin Atlantic flights using BMI Diamond Club miles beyond August 31st.