Thousands of British holidaymakers face being stranded overseas today as their tour operator, XL Leisure, prepares to declare bankruptcy.

XL, the third-largest package holiday company in Britain, was trying frantically to secure a multimillion-pound rescue package last night but sources close to the negotiations said that its chances of survival were slim.

Assuming that there is no last-minute rescue, the holiday company will declare bankruptcy today. This will result in its fleet of 21 aircraft being grounded, stranding holiday makers in more than 50 destinations around the world.

Rival airlines are understood to have been approached to repatriate the holidaymakers from places such as Florida and the Caribbean. A source familiar with plans to rescue them said: “They are hoping to make an orderly announcement on Friday so as not to cause a panic.”

As most customers will have booked their holiday as a package, they will be covered by insurance from the Air Travel Organisers’ Licensing. This should pay for their flights back to Britain and hotels but many will be stuck in airports for days as they wait for seats on other airlines.

People who have booked holidays with XL for future dates should also be able to reclaim their money. However, passengers who booked flights and hotels direct with XL but not as part of a package will lose theirs.

XL is the third-largest package holiday company in Britain after Thomas Cook and Tui Travel, which owns First Choice. The company sponsors West Ham United, and its financial difficulties call into question the future of a £2.5 million annual sponsorship deal with the Premiership football club.

XL has its name on the front of the shirts and the logo emblazoned on the roof of one of the stands at Upton Park, the club’s home ground in East London. The sponsors are also given a hospitality box at the ground.

The probable failure of a tour operator as large as XL, which owns the brands Kosmar, XL.com, Freedom Flights and Travel City Direct, will shock the travel industry.

The economic climate combined with high fuel costs has put pressure on all airlines and holiday companies. Last month Zoom, the low-cost transatlantic airline, declared bankruptcy, stranding hundreds of passengers in Canada and the US.

Seguro Travel, a package holiday operator based in Scotland, said yesterday that it was entering into administration. The company offered package deals to Gran Canaria and Costa Brava from Glasgow. Seguro put blame for its closure on the failure of Futura, a Spanish airline that provided 80 per cent of its flights.

So far this year more than two dozen airlines and holiday companies have gone into bankruptcy and analysts believe that many more will follow in the coming months as seasonal demand and revenue drops sharply in the winter.

One industry expert said: “This will cause great trauma for many people. But it is not surprising, as many weaker airlines and holiday firms will struggle in the current environment.”

XL operated from Gatwick, Manchester, Glasgow, Newcastle and Birmingham. According to its last full set of financial results, it lost £24 million on a turnover of £550 million in 2007. It has more than 2,000 employees and is understood to owe large sums of money to main lenders Barclays and Straumur, an Icelandic investment fund. Its total debt was more than £200 million, according to company documents.

XL was not available for comment last night.

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