The European Commission launched a fullscale investigation into Airtours plc's bid for First Choice Holidays plc yesterday, blocking its attempt to become Britain and Ireland's biggest holidays firm. The Commission's decision delays by a maximum of four months a final ruling, reviving the hopes of First Choice and Switzerland's Kuoni Reisen Holding AG that they can push through their own agreed merger proposal in the interim.

The Commission said its investigation was likely to focus on whether the takeover would give the major players a dominant position in the British market, affecting prices.

The bid raised similar issues with respect to the package holiday market in Ireland, the Commission said in a statement. First Choice owns JWT and Falcon here, while Airtours owns Panorama Holidays.