Boris Johnson is facing a furious backlash over plans for a new "amber watch list" which could trigger fresh chaos for holidaymakers.
Travellers are braced for changes to the traffic light system this week, which could see countries like Spain shifted into a tougher category where they could change to the red list at short notice.
Arrivals from red list nations must pay £1,750 to quarantine in a Government-approved hotel.
Tory minister Matt Warman confirmed the plans were being considered, saying watch lists allow people to make "informed decisions" about the "direction of travel that a country is going in".
There is already a green watchlist, with countries like Madeira and Croatia marked as at risk of shifting to amber.
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But a Tory MP warned the plan could see bookings "collapse" amid fury from the travel industry.
Senior ministers are divided over whether to press ahead with the amber watch list plan, which was said to have been approved last week.
“We'll have to wait and see what the data looks like later this week,” a source told the Daily Mail.
“But there will have to be a very strong case to create another category at this stage.
"There is a lot of opposition to anything that causes more confusion and uncertainty right now.”
Huw Merriman, the Tory chairman of the Commons Transport Committee, also sounded the alarm.
He told the BBC: "An amber watchlist will be viewed as a massive red flag which is likely to cause bookings to those countries on that watchlist to collapse.
"In my view we don't need any more uncertainty, complexity or anxiety for passengers or this beleaguered sector, it just needs clarity."
Furious travel industry bosses warned against another tier for travel, after the last-minute decision to put France into an "amber plus" category last month.
This meant quarantine exemptions fro double jabbed holidaymakers returning from amber list countries did not apply to France.
“We have totally squandered the vaccine dividend we had built up. An amber watch list would be the sixth tier since the Global Travel Taskforce was published,” said Airlines UK boss Tim Alderslade.
“Amber at the moment is a red flag for travellers, it's a glaring warning sign because of the worry that people have that they will either be stranded overseas or they will have to quarantine either in a hotel or a home for 10 days."
Labour chairwoman Anneliese Dodds fumed: “We don't want to see additional confusion and chaos here... We've been here before, we've been in this chaos before, and yet Government seems to be providing just more of the same, more confusion, more extra categories.”
Paul Charles, of the PC Agency travel consultancy, said: "Adding an amber watchlist category will only confuse consumers more and choke off bookings for August.
"People cannot be bothered to take so much risk alongside the financial pain of testing. Such a category will snuff out most outbound August travel."
The PC Agency says 12 destinations including Germany, Poland, Canada, Austria and Romania could go fully green.
All 12 have infection rates below 30 cases per 100,000 of the population, compared with the UK's 286 per 100,000.
Most have also fully jabbed more than half their adult populations.
The 12 include Bosnia, the Czech Republic, Hungary, Latvia, Lithuania, Slovakia and Slovenia.
Heathrow Airport boss John Holland-Kaye told the BBC existing rules were “quite complicated”, adding: “We need to simplify as much as we cannot make it easy for people to travel. More countries going onto the green list will help.”
He went on: “The travel industry has been really devastated over the last 18 months with almost nobody able to fly.”
Mr Warman defended the idea on Sky News, saying: "The point of the watch list that you refer to is to try and give people a sense of the direction of travel that a country is going in, it's to try and provide people with as much information as possible when they make those decisions about where they might want to go on holiday.
"Of course it is... great news to be opening up, that people who are coming back from amber list countries don't need to be quarantining, that's a good sign of the direction that this country is going in thanks to the vaccination programme, but we do have to bear in mind that other countries are in a range of other positions.
"The watch list provides people with more information about those positions so that people can make informed decisions."
He said Brits needed to make "common sense judgements" on whether to travel abroad.
It comes as fully vaccinated EU and US arrivals were able to travel to the UK without quarantining after a change in the rules.
From 4am on Monday, the UK now recognises jabs administered abroad as long as they are approved by European and American regulators.