Other travellers from Dundee, who have yet to go on their holiday, will be forced to make substitute arrangements to ensure their break in the sun can go ahead.

Seguro Travel Limited said it had ceased trading with immediate affect, causing thousands of British passengers to make alternative plans to get home.

The travel company, which offered package deals from Glasgow and Prestwick to Gran Canaria and Costa Brava among others, blamed cash troubles of the Spanish airline Futura that operated 80% of its flights.

Futura Airlines blamed high fuel costs for the cancellation of flights and the launch of insolvency proceedings in Palma on Monday.

Tour operators in Dundee said today hundreds of locals have been affected by Futura’s collapse.

Colin Ramsay of Ramsay Travel in Dundee told the Tele “several hundred” of their customers had been affected, but stressed it was not their fault.

He said, “Several hundred people had booked up to go on holiday with the travel company to places such as The Algarve, Majorca, Gran Canaria and Lanzarote.

“Thankfully, because they booked with a travel agent, they will be able to get a refund or, in some cases, we will be able to transfer money they have paid already to a different travel company and another similar holiday.

“We also have quite a number of people already out at these locations, but they are being taken care of by the Civil Aviation Authority and we hope their holidays will not be too badly affected.

“We only found out about the problem yesterday afternoon and staff stayed in until 9pm and have been in since five this morning to let customers know and to try to sort out their holidays.

“It looks like no one will lose money because of it. It is crucial to us to ensure our customers do not suffer and, so far, people have been very understanding.”

Other tour operators such as Barrhead Travel in Dundee have emphasised that all customers are protected by the Air Travel Organisers Licensing system.

“We’re handling each case as it comes in and we’re trying to re-book and work with other tour operators to arrange alternative flights,” said a Barrhead spokesperson.

“We’ve had a lot of upset customers on the phone. We’ve got a task team working hard to deal with everyone’s questions and resolve their problems.”

A spokesperson from Thomas Cook said, “We are working very closely with other airlines to reallocate our passengers to alternative flights. Passengers with changes to their travel plans will be advised of any new arrangements as a matter of urgency.”

The CAA has been called in to protect customers, who have booked with Seguro.

The travel firm, which also traded under the names Seguro Holidays and Kent Escapes, was based in Macclesfield. It operated out of Glasgow, Prestwick and Kent airports to Spain, the Canary Islands and Portugal and sold mainly through travel agents.

There are 2500 holidaymakers currently abroad and approximately 18,000 customers with forward bookings, who are yet to travel.

The CAA, under its ATOL scheme, is making arrangements for customers abroad to complete their holidays and return to the UK and to fully refund those with forward bookings.