Six million holidaymakers who book their trips through low-cost websites will be protected if their tour operators go bust.
Ministers will unveil reforms this week to the Air Travel Organisers' Licensing (Atol) scheme, which covers package holidays if a firm fails. Theresa Villiers, the Aviation minister, is expected to widen the definition of a package holiday to cover deals where flights, accommodation and other services are booked within a short time.
It follows the growth of aggregator websites which draw together low-cost flight and hotel deals, but aren't official package deals found in high street travel agents. An extra six million holidays will be covered.
A government source said: "Atol has provided protection for millions of holidaymakers and we're determ- ined to see this continue. Insolvencies in recent years have shown us how important it is that customers be protected, but the scheme is in need of reform."