A summer holiday price war broke out yesterday when two major tour operators unveiled their bargains for 2004.

Both operators urged holiday makers to book early to get the best deals, saying that January remained the most popular month for booking a holiday.

Lunn Poly, the high street travel agent run by Thomson Holidays, offered savings of up to 30 per cent off some of its summer breaks.

Meanwhile its rival Airtours, part of the troubled MyTravel empire, unveiled free child places and discounts of up to 25 per cent.

The Lunn Poly bargains also include a "buy now pay later" deal, with nothing to pay until March 2004, as well as free insurance on all summer holidays. The offers are part of an £11m promotion by the company.

Meanwhile, Airtours offered early bookers as much as £500 per couple off cruises and 10 per cent off all long-haul holidays in its Far & Away brochure.

Robin Parry, marketing director at Airtours, said the deals aimed to encourage holiday makers to book early. "We want people to book early, and are prepared to reward them for doing so," he said.

"I think customers can be cynical about the various offers, like free insurance or free kids' places, and the small print that accompanies them.

"We want to change this and earn their trust. The first step is to simplify our offers and make them more transparent. So quite simply, book early and get the pick of the deals. Wait until later and these deals may not be available."

Chris Mottershead, managing director of Lunn Poly, said: "There's a lot of talk about people booking holidays later, but January remains the most popular month to book a summer holiday by far.

"More than a third of the nation books a holiday during January and February because it's the best time to get a great holiday deal.

"The last couple of years have been very unsettled - war in Iraq was building up last year - but we're expecting sales this January to be very strong."

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