A holiday website has paid out £1million in refunds to customers whose holidays were cancelled due to the pandemic.

Lastminute.com was threatened with court action by the competition watchdog, spurring them to give thousands of customers their cash back.

The online travel agent gave package holiday customers the refunds they had been waiting for, says the Competition and Markets Authority (CMA).

But £300,000 worth of refunds are still outstanding as Lastminute says it doesn't have those customers' bank details.

CMA chief executive Andrea Coscelli said: “We encourage customers who are still awaiting refunds for package holidays cancelled because of the pandemic to contact Lastminute.com. A dedicated contact form will be published on Lastminute.com’s website later today.”

The watchdog has been assured by Lastminute that the refunds would be made by the end of January at the latest.

However, around 2,600 customers were still owed money by the company as of two weeks ago, prompting the CMA to threaten legal action.

The airline Ryanair was blamed by Lastminute as being part of the cause of the delay.

Ryanair said these were "false claims".

Only customers who had booked package holidays were due a refund, not flight or hotel only bookings.

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Mr Coscelli said: “Lastminute.com has now paid back a further £1million in outstanding refunds to thousands of customers whose package holidays were cancelled, in line with the commitments that it gave to the CMA.

“This follows the CMA’s formal warning that it would take Lastminute.com to court if it failed to refund customers, as promised.

“This means that in total, Lastminute.com has issued over £7million in refunds due to action taken by the CMA. Any money outstanding is now owed to customers whose bank details Lastminute.com does not hold.

“Lastminute.com has agreed to contact customers who have not yet received their money back.”

Lastminute has now paid back more than £40million to affected customers.

The travel agent apologised previously to those customers who were left waiting to get their money back.