The Association of British Travel Agents (Abta) is predicting angry showdowns in hotel lobbies as holidaymakers who have already paid for package deals to the Balearics are slapped with a new eco-tax from March, adding up to £75 to the cost of a two-week family holiday.

The announcement of the tax coincides with a major push by the islands - traditional trailblazers of cheap package holidays - to shrug off their downmarket image. (Some 3.5 million British tourists go to the Balearics every year.) The Balearic Institute of Tourism has just unveiled plans for an image campaign for Mallorca, Menorca, Ibiza and Formentera, presenting them as quality destinations full of cultural heritage, wildlife and activities.

'They are doing a lot to change their image but they are coming across as greedy,' said Abta spokesman Keith Betton. 'Customers are going to be told when they arrive at the hotel that they have to pay the tax.'

The tax will cost an average of one euro (62p) per person per day, including children over the age of 12, though people staying in top-quality hotels will be charged double that amount. Even campers will have to pay €0.25.

The tax has been in the pipeline since 1999 but was delayed in the face of opposition from the Spanish government. Last week, the Balearic islands got the go-ahead to charge it while a tribunal decides if the levy is constitutional or not - a process which the tourist board admits could take up to six years.

Abta says the fund will not be able to be used until that time - and if ruled unconstitutional will even have to be refunded to holidaymakers. But a tourist board spokeswoman said though it would be refunded if a ruling went against the islands, the money would in the meantime be used on a series of projects such as buying up abandoned hotels, knocking them down and turning the land over to green space. The tax is expected to raise £36 million a year.

'We are not turning our backs on tourism, but there is a price to pay for abusing the system over a long period,' said Tiffany Blackman, director of the Balearic Institute of Tourism.

Tour operators say they want the tax to be absorbed by the tourist industry.

Thomson, which lists Mallorca as its number one destination, said the tax was disappointing and ill-timed. 'People who haven't booked their holidays might be swayed away from the Balearics in this price-sensitive time,' said a spokeswoman.

A spokeswoman from JMC added: 'Over the last six years the Balearics have been steadily increasing costs and the result is that tourist figures have not been increasing.'