Budget Travel has accused some travel agents of blacklisting its products following a decision by the company to halve the commission paid to agents.

Budget, which is the largest tour operator in the State, announced in October that from January 1st, it would cut the commission paid to agents for selling its holidays to 5 per cent from 10 per cent. Most rival operators continue to pay the 10 per cent rate.

The tour operator says that blind tests it has undertaken, together with customer feedback, has made it aware of "quite a widespread campaign by travel agents to deliberately exclude Budget travel options from choices being offered to customers interested in booking holidays for next year".

The issue is coming to a head because January 1st sees both the implementation of the cut in commission and the start of the key booking season for the industry.

"The vast majority of holidays booked for next year will be booked in the first three months of the new year," said a company spokesman. "The Budget view is as Budget is the leading tour operator in the market, travel agents are failing in their duty to customers if they decline to include Budget Travel in the options presented to customers."

Budget, which has annual sales of more than €200 million, says it accounts for more than 40 per cent of the package travel market in Ireland. It expects to have sold 400,000 foreign holidays to Irish customers this year.

The company says it is now considering its options. These are understood to include a referral of the matter to the Competition Authority, which would examine whether travel agents were acting together against a particular supplier in an anti-competitive manner.

Alternatively, Budget chief executive Mr Eugene Corcoran said the company might refuse to deal "with those agents who are trying to boycott Budget Travel".

Budget Travel claims it needs to bring costs into line with scheduled airlines that are increasingly operating direct flights to holiday destinations. While it also sells through its own travel outlets and by phone, the bulk of its sales come through independent travel agents.