The government rejected a requested bailout of £150 million for Thomas Cook which would have stopped the firm going bust, Boris Johnson has admitted.
The British travel company entered compulsory liquidation overnight, leaving more than 150,000 travellers stuck overseas.
The Civil Aviation Authority said the Government has asked it to launch a repatriation programme over the next two weeks, starting on Monday and running to October 6.
The programme is set to be the UK's biggest ever peacetime repatriation.
Boris Johnson admitted Sunday night the government rejected bailing out the firm, calling it a "moral hazard", the Independent reports.
He said at the time: "It is a very difficult situation. Obviously our thoughts are very much with the customers of Thomas Cook, the holidaymakers who now face difficulties getting home.
“We will try our level best to get them home – there will be plans ready to deal with that if it is necessary.”
But he added: “It is perfectly true that a request was made to the government for a subvention of about £150m.
“Clearly, that is a lot of taxpayers’ money and sets up, as people will appreciate, a moral hazard in the case of future such commercial difficulties that companies face.”
“We need to look at ways in which tour operators, one way or another, can protect themselves from such bankruptcies in the future.”
What Thomas Cook has said about the collapse
Following news of the collapse, Peter Fankhauser, Chief Executive of Thomas Cook admitted additional requests in the final few days of negotiations proved "insurmountable".
In a statement, he said: “We have worked exhaustively in the past few days to resolve the outstanding issues on an agreement to secure Thomas Cook’s future for its employees, customers and suppliers. Although a deal had been largely agreed, an additional facility requested in the last few days of negotiations presented a challenge that ultimately proved insurmountable.
“It is a matter of profound regret to me and the rest of the board that we were not successful. I would like to apologise to our millions of customers, and thousands of employees, suppliers and partners who have supported us for many years. Despite huge uncertainty over recent weeks, our teams continued to put customers first, showing why Thomas Cook is one of the best-loved brands in travel.
“Generations of customers entrusted their family holiday to Thomas Cook because our people kept our customers at the heart of the business and maintained our founder’s spirit of innovation.
“This marks a deeply sad day for the company which pioneered package holidays and made travel possible for millions of people around the world.”
