Dozens of British families duped into booking fake holiday villas in Spain are to receive some of their money back.

The decision by Holiday-Rentals.co.uk to pay 'compensation' for victims of the Morairaway.com swindle follows a series of articles from Timesonline on what appears to be the biggest-ever villa scam.

And the move also comes as news emerges that 72 Britons have been duped by a second villa scam, in Cyprus.

It is now known that a total of around 145 Britons paid an average £3,000 to Morairaway after spotting adverts on two of the biggest British villa rental sites, Holiday-Rentals and Holidaylettings.co.uk.

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The Spanish-based website shut down and those behind it disappeared three weeks ago. Timesonline has been contacted by victims in 11 other countries across Europe and the overall scam is conservatively estimated to be worth in excess of £1m.

Holiday-Rentals, part of the HomeAway group, carried adverts for 48 of the fake villas for three months. Those customers who registered online for its rental guarantee scheme are covered up to £3,300. The cost of flights and care hire are not covered.

But while not legally liable, the company today introduced a blanket guarantee - and will retrospectively pay back 50 per cent of the booking value (up to £700) to customers who didn't sign up for the rental guarantee scheme.

The company denies it is in response to pressure from victims or Timesonline, or that is has a moral responsibility to reimburse those affected.

Spokeswoman Sarah Chambers said: "This does not affect our terms or conditions, or our business model; we remain a classified listings business and as such, the legitimacy of properties ultimately remains the responsibility of individual owners.

"However now all those who have booked on any HomeAway site worldwide, including those affected by Morairaway, will automatically be covered for up to 50 per cent (or a maximum of £700) for any deposits or rental fees they pay to advertisers on our sites.

"We will continue to offer increased coverage of up to £3,300 via our free Rental Guarantee to those who register before they pay."

The moves comes after a furious response from customers angry that the two lettings sites did not spot the fake adverts. Many are also angry that the Holiday-Rentals rental guarantee is not clearly enough displayed on its homepage - or that is automatic.

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