Leading tour operators yesterday launched a legal challenge to the Government's Air Passenger Duty (APD) airport departure tax.
If successful, the judicial review could mean the complete withdrawal of APD, which Chancellor Gordon Brown doubled at the beginning of this month.
And a successful outcome of the legal action by the Federation of Tour Operators (FTO) could leave the Government open to claims by airlines and their customers for the repayment of more than pounds 2 billion that has been collected since 2004.
The decision to double APD from February 1 means passengers now have to pay pounds 10 for economy class fights to Europe, pounds 20 for business and first class flights to Europe and pounds 40 for economy and pounds 80 for business and first class long-haul flights.
The FTO is arguing that as a signatory to the 1944 Chicago Convention on International Civil Aviation, incorporated into EU law in 2004, the UK Government is not entitled to impose dues or charges on aircraft solely for the right of transit over, or exit/entry from or into the UK from a fellow state.
The FTO said charges were only permitted if they were cost-based in relation to the provision of a service, such as use of airports or air navigation services.
It said the APD was simply a tax which raised revenue for general Government spending.
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The change followed European Union regulators' complaints about deceptive trading practices.