The internet allows holidaymakers to put together their own trips

The deal - creating the second biggest travel operator in Europe - would not harm consumers, the EU said.

Internet growth has given independent operators new channels to reach consumers, so a tie-up of High Street names posed fewer concerns, it added.

The merged firm, to be named Thomas Cook Group, will be based in the UK and listed on the London Stock Exchange.

"The increased use of the internet and of online-distribution have opened up a direct route to market for smaller suppliers of package holidays and also allow travel agents and consumers to combine different travel components themselves," the EC ruling said.

It added that the deal would also not harm consumers in the UK and Ireland as they "would continue to have access to package tours at competitive prices".

Declining demand for package holidays has put pressure on the travel industry's traditional earnings streams.

Shares in both firms have rallied since the merger - as well as plans to cut costs and trim jobs - was announced.

The enlarged group said that it would be able to cut �75m a year in costs across its businesses.