AAC members have suffered "losses many times greater than expected" due to Cook’s practice of collecting final holiday balances from consumers many months and sometimes more than a year ahead of travel.

Several AAC members sold their flights and holidays through Cook’s retail shops and the Freedom Travel Group, so suffered losses when Cook went into liquidation in September as they are still required to provide these holidays under their own Atols.

As a result, the association said it had launched a "full review" of its members’ relationships with travel agents.

Alan Bowen legal advisor to the AAC, stressed members who currently sell through agents “want to continue to do so, but not at the expense of putting their own business at risk”.

"We are looking at alternative ways of working, some of which would adversely affect agents and this is an issue we want to avoid," added Bowen.

"We could insist on funds being held in trust in a similar fashion to Iata, or require customers to pay direct to operators with commission being refunded - a policy chosen by a number of cruise lines at present."

AAC operators are facing higher losses from sales made through Cook outlets as the former travel giant had been collecting full balances from customers – not just deposits – for holidays departing in 2020 before going into liquidation.

"It appears staff were incentivised to give customers discounts or promises of money cards to extract funds far in advance of the due date," explained Bowen.

Guy Novik, the AAC’s vice chair and chief executive of USAirtours, added: "Although no member had been aware of the practice, we cannot afford to allow these losses to occur again and our subcommittee is looking at all possible solutions."

AAC chair Lindsay Ingram, from Newmont Travel, said the association would "welcome" discussions with agents and other Atol holders with the "urgent aim of finding a mutually acceptable solution because we cannot continue with the current clear lack of trust which the recent failure of Thomas Cook has left us with".