Grayling made the comment during a statement on the collapse of Monarch Airlines to the House of Commons when he gave an update on the ongoing repatriation flights for Monarch customers stranded overseas.

“We need to look at all the options, not just Atol, but also whether it is possible for airlines to be able to wind down in an orderly manner and look after their customers themselves without the need for government to step in,” said Grayling.

“This is where we will focus our efforts in the weeks and months ahead.”

All of Monarch’s 110,000 customers who were on holiday at the time of the company’s collapse on October 2 are being flown back to the UK, regardless of whether they were covered by Atol.

So far, 80,000 of these passengers have returned home in an operation that is expected to cost around £60 million.

“The Atol scheme will of course provide the financial cover for those with Atol protection,” added Grayling.

“We are currently engaged in constructive discussions with the relevant credit and debit card providers in order that we might recoup from them some of the cost to taxpayers of these repatriation flights.

“We are also having similar discussions with other travel providers through which passengers may have booked a Monarch holiday and I would like to thank them for their constructive behaviour and approach.”

The government has been criticised by the trade for undermining the Atol system by deciding to bring all passengers back to the UK, even if they are not covered by Atol.