Package holidaymakers look certain to be denied the option of paying for extra legroom on some flights because of a ruling by Customs & Excise.

From April 1 they will be charged twice the normal air passenger duty (APD) - or £40 on flights outside the European Economic Area - which comprises the European Union countries plus Norway, Iceland and Liechtenstein. That is the same charge faced by those flying in business class, many of whom have their tickets paid for by their company.

Tour firms fear this will be enough to deter many customers. As a result, First Choice says it may have to abandon its recently-announced premium-class on medium-haul trips, such as flights to Cyprus and Turkey, while Thomson, which had been working on a plan to offer something similar, has also been forced to think again.

With unfortunate timing, First Choice was told its appeal against the decision had been rejected only four days after news emerged that a 28-year-old woman had died of deep vein thrombosis, apparently triggered by sitting for long hours on a flight home from Australia.

This labyrinthine tale begins with a decision by the European Commission that the British Government could no longer charge lower duty on domestic flights than on those to and from other EU countries. APD, it ruled, was a tax on departures from UK airports, so if Britain was levying £10 on a London-Brussels fare, it should be charging UK domestic passengers £10 each way.

But £20 on a domestic fare would have looked a disproportionate amount of tax, particularly to passengers buying cheap tickets on low-cost airlines such as easyJet. So the Government decided to lower the duty on international flights within the EU instead. That meant economy class passengers and those in the usual, more cramped charter seats, would pay £5 less. To balance the books, however, it announced premium-class passengers would pay double.

The charter problem arises because of the wording of the regulation. Customs & Excise has defined "premium" as anything other than the lowest class on any aircraft. A Customs & Excise spokeswoman said: "The criteria had to be drawn somewhere. We spoke to the charter airlines and they told us the maximum proportion of passengers paying premium fares is only 5%. Also, for those passengers who pay extra for a seat with more space near an emergency exit, the lower rate of duty still applies."