A HOLIDAY price war looked set to blow up today after Britain's biggest holiday company hit back at Airtours over its bid to become number one tour operator.

Thomson said it was determined to keep its place as the biggest operator in Britain and said it would increase the number of holidays on offer for summer 2000 at "very attractive prices".

If Airtours £852 million bid for rival First Choice announced yesterday succeeds it would become the UK's biggest holiday group - knocking Thomson's off its top spot.

But Thomson's chief executive Paul Brett told the group's annual general meeting: "We have been market leader for 25 years, and we do not intend to relinquish that position."

Thomson also turned up the heat in the battle to attract holidaymakers by announcing a new budget holiday brand targeting customers wanting low-cost, no-frills breaks.

Airtours today said if its deal with First Choice went ahead there would be "substantial benefits for customers, staff and shareholders of the enlarged Airtours Group" which employs more than 1,200 people at its Helmshore and Accrington centres.

But the Consumers' Association today warned the deal would hit holidaymakers by restricting choice.

Fears of a holiday price war sent shares in Airtours down by 27p to 431p.

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