THOUSANDS of Britons have lost their holidays following the collapse of a leading cruise company that was formerly based in Southampton.

All Leisure Holidays, which operated cruises under the Swan Helenic and Voyages of Discovery brands, has ceased trading.

About 400 people currently overseas with the company look set to complete their holidays.

But another 13,000 customers who have booked for the coming year will have to find alternatives. It is thought that most of them will get their money back under protection schemes run by holiday trade body ABTA.

Concerns over the future of the company emerged after it cancelled New Year cruises at short notice, citing “operational reasons”.

All Leisure Holidays is thought to have been hit by a sharp drop in customers, some of whom have been put off by fears of terrorism.

Most of the company's 150 employees were made redundant shortly after the company fell into administration and all future bookings have been cancelled, leaving around 13,000 people seeking refunds.

Around two-thirds of customers are protected under the Atol scheme while remaining holidaymakers on UK departing cruises will be able to get their money back through Abta.

Andy Cohen, head of Atol at the CAA, said: "We understand this will be concerning news for anyone who has booked to travel with the company.

"However, the Atol scheme exists for exactly this kind of situation and we are making immediate arrangements so all Atol-protected customers can claim full refunds as quickly as possible.

"We are also arranging for people currently overseas to get back home to the UK at no extra cost - meaning no-one will be left stranded abroad."

Grant Thornton, which has been appointed as administrator for All Leisure Holidays, said it will work with the CAA and Abta to "minimise the disruption to any vessel workers and future passengers bookings wherever possible".

In a statement, the administrator said it managed to save 200 jobs by selling off sister brands Travelsphere and Just You to Canadian tour operator G Adventures.

Grant Thornton partner Eddie Williams said: "Whilst I am extremely pleased to have concluded a sale of the business which safeguards the holidays and bookings for over 13,500 tours passengers and preserves 200 jobs, I am very disappointed that we have no alternative other than to close the remaining ALH operations.

"The sale to G Adventures was particularly complicated and required extensive interaction with numerous worldwide parties and the licensing authorities during December and over the Christmas period.

"However, the cruise operations have been significantly loss-making over a number of years and the ongoing cost of funding these operations by the tours operations has created significant cash issues for the entire group which has ultimately led to the administration of all businesses."

All Leisure Holidays used to be based in Southampton but more recently operated from Market Harborough.