The government has repeated its commitment to extending Atol licensing to holidays sold by airlines, saying this “should ensure greater clarity”.

However, transport minister Theresa Villiers said she would not act without first consulting on the issue.

In a statement on Atol reform today, the Department for Transport (DfT) made explicit ministers’ desire to have the power to include airline holidays in the regulations, as well as holidays sold by businesses acting as agent for the consumer.

At the same time the DfT confirmed the government’s inability to act without a change in the law.

Villiers said regulatory changes announced today “compliment the clause in the Civil Aviation Bill [presented to Parliament on January 19] that would allow the Atol scheme to cover holidays sold by airlines and those organised on an agent for the consumer basis”.

In an associated document published in response to government consultation on Atol reform, the DfT said: “We have decided Government should have the power to include the sale of flight-inclusive holidays by airlines in the Atol scheme. This should ensure greater clarity.”

The consultation document notes that 40 travel trade responses “strongly agreed” on the proposal to bring in airlines and that eight responses against it “were from the airline business”.

The DfT said: “Alternatives mentioned by the airlines do provide some financial protection, [but] it is not as comprehensive as under the Atol scheme.”

However, the DfT document makes clear the government cannot act to bring flight-only sales by airlines into the regulations without action first in Brussels.

It says: “The power in the Civil Aviation Bill does not allow for Flight Only sales by airlines to be included in the Atol scheme. New legislation at EU level would be needed. The European Commission is considering this matter and we will consider any proposals they make.”