Fáilte Ireland will no longer be inspecting or approving self-catering accommodation from the end of this year, it has emerged.

The Irish Self Catering Federation yesterday reacted angrily to the decision and has predicted closures and job losses will result. The federation says the decision showed a "railroad approach" and would work to the detriment of the self-catering sector in Ireland.

It called on the Minister for Tourism to intervene in the situation and appoint a representative to the board of Fáilte Ireland.

Chairwoman of the Federation Mary Power said: "This decision, which was taken without consultation with the industry will result in over 3,500 businesses being affected in 2008 and subsequently will see job losses; closures of properties and another blow to rural Ireland and rural tourism."

Fáilte Ireland has also said it will no longer produce its annual guide, Holiday Homes.

Since the 1970s, guests booking self-catering accommodation in Ireland could be guaranteed a property met a certain standard if it was Fáilte Ireland approved.

This approval system, which was operated by the regional tourism authorities, meant that premises were inspected every year and had to reach detailed and specific levels of quality.

Since regional tourism agencies merged into Fáilte Ireland and its role became that of marketing rather than a regulatory body, the organisation decided the classification of holiday homes should stop. In addition, the number of holiday homes has grown dramatically in recent years.

There are more than 10,000 holiday homes in Ireland, almost half of which come in groups of eight or more. They will continue to be inspected by contractors for Fáilte Ireland.

The more than 5,000 other registered are individual properties, usually operated by the owners. It is these properties, the backbone of the holiday home market, that will no longer be able to provide a guarantee to customers.

Fáilte Ireland is drawing up a charter for owners which will be a self-approving mechanism for properties.

It is expected a holiday homes guide will be published by an independent company, which will sell advertising space to cover the costs.

Tourist offices may stock the guide, if it is free to consumers and if it clearly advises that listings are not validated or approved.

Fáilte Ireland says it wants to prioritise marketing and product development "rather than devoting scarce resources to acting as an industry regulator".

It said its ability to act as a regulator or "policeman" was constrained because there was no legislation requiring the registration of individual houses/holiday homes to let.

Delphine Geoghegan, whose property, the Old Milking Parlour in Wicklow was inspected around two months ago, received a letter telling her of the termination of the system at the end of last month.

"Our property is a big investment and I feel that Fáilte Ireland exists to market Ireland as a quality destination and promote a level of excellence. I am in a mixed mind about how to go forward with marketing now."

Gulliver Ireland, the national booking system, tourist offices and the Fáilte Ireland website will ask properties to sign up to the charter and will also have its own grading scheme so customers can make choices.