FEARS FOR the future of MyTravel heightened yesterday after it emerged that Alistair Darling, the Transport Secretary, has held a series of meetings with the Civil Aviation Authority about the troubled tour operator.

The Department for Transport said that Mr Darling had met the CAA several times recently after the authority, which licenses tour operators to fly, increased its financial scrutiny of the business, which used to be called Airtours.

But a spokeswoman emphasised that the Government was not considering a bailout of the business and said that it was quite a different proposition from Railtrack: “The Secretary of State has had a number of meetings with the CAA about MyTravel and has asked to be kept informed of the situation. But this is a privately run company and the Government would not consider supporting it.”

MyTravel, which takes about 12 million people on holiday each year, has been rocked by the crisis of confidence in travel since September 11, 2001, by accounting problems, and more recently by a fall in bookings because of the Iraq war.

The market value of the company, which runs the Going Places chain of travel agents, has plummeted from £1.23 billion to £59 million. It has also announced plans for 2,000 job cuts and the sale of its foreign currency business.

The CAA has the power to ground a tour operator if it is concerned about its financial position, although this rarely happens to big businesses. The CAA runs the Atol scheme for tour businesses that use air travel. This requires companies to pay a bond, which can be used to repatriate holidaymakers and to refund customers who had paid but not travelled, if the operator becomes insolvent.

MyTravel renewed its £400 million Atol bond last September but the CAA is able to ask for more financial information from tour operators whenever it pleases. A spokesman for the CAA refused to say whether further meetings were planned or whether MyTravel had been asked to give any additional assurances so that it could continue operating.

A spokeswoman for MyTravel said that the company was providing the CAA with regular information but would not outline the case the company had made to the authority. MyTravel insisted that it was fully bonded under CAA regulations and that its licence was intact.

Although the Department for Transport said that no government money would be used to support MyTravel, it is possible that some taxpayers’ money could be used to repay or repatriate holidaymakers if MyTravel were to go bust. This is because some of those costs are borne by the Air Travel Trust, which is backed by the Government, if the bond is not large enough to cover all the costs.

MyTravel’s liabilities total £600 million, including £250 million in credit facilities and £130 million net debt. It lost £72.8 million in the year to the end of September after incurring accounting errors that cost £70.6 million. These related to MyTravel’s insurance business. Publication of the results was followed by the resignation of the chief executive, Tim Byrne, who received a £1.2 million payoff.