There are fears even fewer people will risk going on a holiday if a new "amber watchlist" is introduced, listing countries currently classed as amber at risk of moving to red.

       Holidaymakers returning from a country which was added to the red list while they were there would then have to pay for quarantine in an approved hotel for 10 days.

       A Government source confirmed it is possible an amber watchlist may be announced.

       It is reported that Spain and Italy have been mentioned in talks about which countries could feature in the new at-risk category.

       The anxiety comes as the Government will this week revise its "green list" of countries that can be visited without having to self-isolate on return. Ministers are under pressure to drop the testing requirement on day two after arrival in England for vaccinated passengers and are accused of taking an "overly cautious approach" that is jeopardising jobs.

       Tim Alderslade, the chief executive of Airlines UK, said: "It's time that travel got the green light. We're at the height of the summer season but despite the success of the vaccine, travel is still hugely restricted and we're falling well behind the rest of Europe. "Too many countries are still on the amber list and too many travellers are being forced to pay for expensive tests - essentially an extra tax on travel - putting holidays and reunions out of reach for many."

       Airline bookings to and from the UK were at 16 percent of 2019 levels in June, the lowest among the large European markets, according to the International Air Transport Association.

       Ryanair called for the axing of the controversial traffic light system.

       A spokesman said: "To support the aviation industry - one of the most impacted by the Covid pandemic - the Government should scrap the shambolic traffic light system, allow all vaccinated citizens and children under 12 to travel freely without any restrictions, and implement tourism recovery schemes that would allow airlines to rebuild traffic and connectivity, such as a suspension of the [air passenger duty] tax."

       A Government source dismissed calls for the tests to be axed, saying that "testing isn't going anywhere".

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       Holiday restrictions at a glance