Some Thomas Cook customers will wait 60 days for refunds - CAA

It said direct debit customers would be refunded within two weeks but others would have to wait up to 60 days.

In an update on 'Operation Matterhorn', which was started to assist Thomas Cook customers, the CAA said it had to issue 360,000 refunds, three times larger than any other programme of its kind.

The regulator said it planned to launch a new online refund system from October 7 which would generate an electronic refund form.

The CAA said it had now repatriated more than two-thirds of the people on holiday when the tour operator collapsed, adding that at least another 43,000 were due to return on or before October 6.

"The scale and complexity of this operation will inevitably cause some inconvenience and disruption and I would like to thank holidaymakers for bearing with us," said CAA chief executive Richard Moriarty.

The airline collapsed after rescue talks on providing a £200m bridging loan failed. The company was struggling under £1.7bn in debts, tough competition and rising fuel costs.

Around 100,000 customers paid for their future holiday by direct debit, with the remaining 265,000 using other payment methods such as credit and debit cards.

BOSSES FACE GRILLING FROM MPs

Anger has been focused on the size of pay packages of senior management at the world's oldest travel company. Parliament's cross-party Business select committee instigated last week a probe into the firm's demise and have summoned bosses to appear.

Committee chair Rachel Reeves MP said the collapse of Thomas Cook has "uncovered what appears to be a sorry tale of corporate greed, raising serious questions about the actions of Thomas Cook’s bosses and their stewardship of the business".

"This latest corporate failure has shone a light once again on the use of aggressive accounting methods to aid bumper pay-outs to company executives and the apparent inability of auditors and regulators to curb these practices in the wider interests of shareholders, investors, and the public."

Business Secretary Andrea Leadsom has also launched a taskforce, although new reports have suggested she declined to speak with Thomas Cook bosses in the build-up to its collapse a week ago – as the company was desperately seeking a Government guarantee to satisfy its lenders.

Leadsom was also placed under pressure the Reeves' committee over the pace of audit reform, especially in light of the high profile collapse of government contractor Carillion and High Street retail chain BHS.

In a letter to the Business Secretary, Reeves said the committee was "dismayed that similar issues that we identified in the collapse of Carillion and BHS may have occurred at Thomas Cook, including the role of auditors in identifying and addressing problems".

"This latest collapse reinforces the need for urgent and meaningful reform of the audit industry, as we argued for in our report on the future of audit," she said.