More people are booking their holiday using the internet

The job losses, representing about 6% of TUI's 13,000 British staff, follow a review of UK operations by the struggling German firm.

TUI, which has not ruled out compulsory redundancies, blamed changes in the way people book holidays for the cuts.

Lunn Poly is the UK's largest travel agency, with more than 800 stores.

Package pressure

As part of the changes, the Britannia name will be phased out and replaced by Thomson Fly, the same name as the low-cost airline launched by the firm last year.

There is a clear trend that direct bookings are growing while retail bookings are shrinking slightly Rachel O'Reilly, Thomson

Sales of package holidays are flat while greater use of the internet to book holidays has put severe pressure on High Street-based travel agents.

Travel firms have also had to cope with a severe downturn in international travel over the past eighteen months due to the Iraq war, the Sars outbreak and the sluggish global economy.

UK tour operator Golden Sun recently went out of business while Thomas Cook, also German owned, reported losses of �196m for the first nine months of the year.

TUI recently overhauled its UK management.

The firm said many more customers were booking their holidays through the internet, particularly in the south of England.

"People are now more confident using the internet," said Thomson spokeswoman Rachel O'Reilly.

"Travel agents are still the most popular way of booking but there is a clear trend that direct bookings are growing while retail bookings are shrinking slightly."

Travel shake-up

TUI has yet to decide where the cuts will fall although all areas of its business are expected to be affected.

Thomson and Lunn Poly have offices in London, Coventry and Glasgow.

Britannia, which is based at Luton Airport, flies to 37 countries and carried more than eight million passengers last year.

Britain is one of TUI's most important markets, accounting for 80% of turnover within its Northern European division.

Hannover-based TUI, one of Germany's forty largest stock market firms, has been struggling with mounting losses.

Its leading shareholder, investment firm WestLB, has said that it wants to sell its 31% stake by the end of the year.