Airlines and tour operators have reacted angrily to this week's pre-Budget announcement, warning that plans to increase green taxes on the “cash cow” of travel will hasten the end of low-cost flights.

Alistair Darling, the Chancellor, said on Monday that air passenger duty charges on long-haul flights would more than double by 2010, making a trip to Australia £45 more expensive in economy class and £90 more in business. Meanwhile, the cost of European flights will also rise, with flights to Spain £2 more in economy and £4 in business.

In a calculation made on behalf of Times Travel, the Association of British Travel Agents estimated that the move would raise an extra £1 billion in revenue in 2010, on top of the £2 billion that the tax already brings in to the Treasury.

A spokesman said: “The Government has always said that this is an environmental tax, but that has never been the case. The money is not spent on the environment. Travel is being used as a cash cow.”

He said that the UK travel industry employed thousands of people and that job losses were inevitable if people stopped flying because of the higher prices.

Ryanair's deputy chief executive, Michael Cawley, said: “The Government is insane if it thinks that price-sensitive passengers will continue to travel when faced with increased costs.”

The duty is currently £10 for economy flights in Europe and £40 for long-haul, and £20 in Europe and £80 for long-haul in business class. These amounts were doubled in last year's Budget. Under the new scheme, there will be four bands covering different distances. Prices will increase partially next year and then fully in 2010 - rising in economy class to £12 for Europe, £60 for flights of 2,000-4,000 miles, £75 for 4,000- 6,000 miles and £85 for 6,000-plus miles.

Travellers in business class will pay twice these amounts. “Business travel is the lifeblood of the economy,” said Tom Otley, editor of Business Traveller magazine. “This is a weird tax.”

More than 238 million people are employed in travel and tourism across the globe, accounting for 10per cent of all employment, according to the World Travel & Tourism Council, which fears that other countries could act in a reciprocal manner by increasing taxes.

The Australian Government says that it has no immediate plans to introduce a reciprocal tax. Travellers in non-economy seats flying to Australia will pay £170 on air passenger duty from 2010.

Martin Ferguson, Australia's Tourism Minister, said: “I am very concerned that the unilateral action by the UK Government to impose a new climate-change tax by another name will heavily penalise Australia and our tourism industry.”

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