Ryanair says the tax will add significantly to its fares

The firm will end its twice-a-day service from Stockholm-Vasteras to Luton from 28 October.

In addition, the firm will be reducing services from Sweden to Prestwick as well as to London, among other routes.

The tax will add 94 Swedish Kronor (�7.10) for European flights, which Ryanair says adds more than 20% to the price of its fares.

Meanwhile an extra 188 Kronor will be added to the fares for flights beyond Europe.

EU enquiry

Flights from Malmo-Sturup to Stansted will be limited to one flight a day from the existing two and the Gothenburg City to Prestwick service in Scotland will be cut to three flights a week from five.

The controversial tax has not only triggered Ryanair's decision to reduce flights to Sweden but has also prompted an enquiry by the European Commission.

Sweden has decided that some remote parts of the country will not have to pay the tax - but the EU has questioned whether such a differentiated tax regime breaches competition rules.

An EU spokesperson said that it is the uneven application of the tax - rather than the imposition of the tax in general - which is being queried.

The tax is set to come into effect from 1 August.

Earlier in June Ryanair saw a better-than-expected 12% rise in annual profits to �208m.