The Commons Environment, Transport and Regions Select Committee said the Government must decide by 1 October next year which foreign airlines should be blocked from flying to British airports.
It said airlines and travel agents must give a "millennium bug health warning" to those booking holidays for the 2000 new year.
The travel industry reacted cautiously, saying the MPs were in danger of "going over the top". The Association of British Travel Agents said many of its members had already printed warnings in their brochures. A spokeswoman warned against making it mandatory. "That might be a little bit too strong," she said.
The millennium bug is caused by a failure of computers, which identify the year only by its last two digits, to cope with the switch over to a new century.
The problem is acute in the transport sector both because of the widespread use of microprocessors on aircraft, air traffic control, traffic lights and ships and because of the enormity of the implications if it failed.
The Commons committee was alarmed by evidence that many Third World countries had not heard of the problem. "It seems certain that some airlines and airports, and some countries' air traffic control systems, will fail to be millennium compliant. Such failures will pose a risk to passengers' safety, and will lead to delays."
The committee said it was aware that foreign airlines could be blocked from flying to the UK, but "we remain concerned about the possible dangers faced by British aircraft overseas, and British passengers travelling abroad".
Howard Davies, secretary-general of the British Air Transport Association, said it was still unclear whether there was a problem. "The concern I have is that if you actually suggest there might be a problem, people will be convinced there is a problem. It is a little over the top until we know the nature of the problem."
The International Air Transport Association said yesterday passengers need have no fears about computer failure, as airlines were spending pounds 1.4bn preparing for the millennium.
But Gwyneth Dunwoody, who chairs the committee, denied her report was scaremongering.
"Everyone has a right to take a decision based on sensible information and we are not sure. Whilst there is an element of doubt, people ought to be told the truth."
British Airways has already announced that it will not fly to a destination if it believes there is a "safety-related risk". Yesterday a spokeswoman said it would reveal early in the new year which airports it would be using over the 2000 new year.Reuse content