Around 85,000 British tourists are stranded abroad after the UK’s third largest package holiday group, the XL Leisure Group, which operates XL airlines, went into administration, causing all flights to be cancelled and its aircraft grounded.

The Civil Aviation Authority (CAA) said that it was making arrangements to help customers of the four tour companies within the XL group.

David Clover, a spokesman for the CAA, said: “In respect of people who are currently abroad we’re making arrangements and working very closely with the travel industry to organise repatriation flights.

“Clearly though, with XL Airways no longer operating, we’re having to bring in substitute aircraft to bring people home.”

He said that package deals are covered by the CAA’s Air Travel Organisers’ Licensing (ATOL) scheme and those customers will be offered repatriation or their money back if they are on of the 200,000 people who have and advance booking. He advised those with future flights to check their insurance polices, and with their banks or credit card companies about refunds.

Unfortunately anyone who booked directly with the airline or on XL.com will face a fee. However, the CAA says they are in the minority.

The group is the latest travel business to face financial hardship, as the industry struggles with high fuel costs ad an economic downturn.

“As the travel industry matures in Europe, there was always going to be pressure on those operating in the mid-market,” said Last.minute chief executive Ian McCaig.

“You don’t have enormous scale or specialism, so there was always going to be pressure. Economic conditions have really just accelerated that process in the case of XL.”

One XL pilot, who didn’t want to be named told the BBC that he was “completely shocked” when he heard the company had gone bust. He said he was only told the news this morning, and blamed fuel costs for the demise.

The group who last year carried 2.3 million passengers, and has 1,700 employees worldwide left this statement on its company website:

“The companies entered into administration having suffered as a result of volatile fuel prices, the economic downturn, and were unable to obtain further funding.”

Bob Atkinson, a spokesman from Travel Supermarket said XL’s demise would be a blow for the travel trade.

He said: “They are a very large operator and this will send serious shock waves through the industry.

“And what it’s going to do more than anything, it’s going to highlight how precarious the airline industry is at the moment.”

In the battle to help homeowners make it through the winter, a deal between the government and energy companies to reduce household bills is close to being finalised.

The measures are expected to provide the UK’s poorest customers with better insulation and assistance in finding the cheapest gas and electricity tariffs.

Union leaders have called on Gordon Brown to impose a windfall tax on energy companies’ profits, but the government insist that making homes more efficient is a better long-term solution to cutting bills.

The package of measures is expected to include better insulation of all homes over the next ten years and targeted help for the poorest to ensure they have access to the best fuel deals on offer. As well as this, it is understood that energy companies will also make increased contributions to the government’s carbon emissions reductions scheme.

BBC political correspondent Jo Coburn said the deal has taken weeks, if not months to put together, but may not satisfy union leaders who want government money to go directly to cutting bills.

She added that Gordon Brown hoped the deal would be enough to generate a warmer reception from delegates at the Labour Party’s annual conference in two weeks’ time.

Yesterday, the TUC’s annual conference in Brighton backed a motion criticising energy companies and urging the government to impose a windfall tax.

The “big six” energy firms faced criticism for making £1.6bn last year and raising prices by 42 percent this year.

A report published on Monday suggested almost a quarter of the population will be pushed into “fuel poverty” by the end of next year.

The National Housing Federation said by the end of 2009, 5.7 million UK households will be spending at least 10 percent of their income on energy bills, with average household electricity bills expected to increase to more that £500 per year by 2010, and gas bills to around £900.

According to worldwide research published today, the outlook for the UK jobs market is at its weakest for almost a decade, with employers putting new recruitment on hold as business confidence decreases.

A survey of over 55,000 employers by Manpower, one of the world’s largest recruitment companies, reports that, in the final quarter, employment in the UK is the weakest since the beginning of 1999.

The jobs market, however is struggling all over the world. Employers in three quarters of the countries surveyed reported that hiring intentions were weaker than three months ago while two-thirds said that they were worse than a year ago. Countries who are struggling to recruit the most are Spain, Ireland and Italy.

Hiring intentions in the US, where the unemployment rate rose last month to a five-year high of 6.1 percent, are also the weakest since 2003. The UK, however, has replaced the US as the economy considered to be at the greatest risk of a severe downturn, according to the Organisation for Economic Co-operation and Development.

Since the beginning of June the UK financial services and construction industries have seen over 10,000 redundancies, and further job losses are expected as the effects of declining consumer confidence spreads to other sectors notably, retail and the service industry.

Manpower warned that “more businesses will be reducing staff numbers than increasing employees in the run-up to Christmas” with more than 80 per cent of companies “taking a wait and see approach to their recruitment”.

Mark Cahill, managing director of Manpower UK, said: “Employers have faced difficult times since the credit crunch and wider economic and confidence worries really took effect last year. This uncertainty is being reflected by new recruitment plans being put on hold and with slightly more employers now looking to reduce their staff numbers than add to them.

“It is not clear how long the current business climate will last. In the current conditions it is not surprising that many business are not predicting any increase in hiring and are using temporary and contract workers to meet short term demands.”

The total number of people out of work rose by 60,000 to 1.67m during the three months to the end of June, and they are expected to rise.

Andy Brown, managing director of Organisational Consulting at YouGov, said: “Fears around job losses, stagnating wages and poor job opportunities have risen very sharply in the past few months. But in a positive response, many British workers seem prepared to ‘get on their bike’ to find work.”

The government is under renewed pressure from unions, on the eve of the TUC annual conference, with civil servants threatening to co-ordinate a series of strikes with other unhappy public sector workers this winter.

The Public and Commercial Services will ballot 270,000 civil servants, covering every government department and agency, for a “rolling programme of industrial action” planned to start in November to the beginning of February.

The UK’s largest civil service union, PCS, said that it was talking to teachers and college lecturers who are also in dispute over government pay policies, about co-ordinating action.

Around one million public sector workers could be involved in industrial action if local government workers, who have already rejected a 2.45 percent pay offer, joined the strike, said Mark Serwotka, PCS general secretary.

Today [Monday] the TUC Congress in Brighton will debate a motion that will call for co-ordinated industrial action by public sector unions.

So far this year there have already been strikes by local government workers, coastguards, immigration officers, driving test examiners and passport, jobcentre, customs and tax staff, all of whom have been angered by the prime ministers insistence that public sector pay rises should be kept in line with the Treasury’s 2 percent inflation target as measured by the consumer price index. Unions argue that the retail price index, currently rising at 5 percent, is a better guide to living costs.

Mr Serwotka said that a quarter of the union’s members earned less than £16,500. Around 20 percent of civil servants are at the top of their pay band, so would receive no further increase this year.

He said: “The government says it is on the side of hard-pressed families, yet compound the financial misery for hundreds of thousands of hard working people by pursuing an unjust pay policy.

“The government is out of touch with the people who keep this country running and who deliver the everyday things we take for granted. Our members have grown increasingly frustrated by the government peddling the myth that they are the causes of inflation when they see their food, fuel and housing costs soar.”

Keith Sonnet, deputy general of Unison, the largest public sector union agreed, saying that there was a “huge level of unhappiness” among public sector workers that could severely damage Labour at the next general election. “We expect a Labour government to do more,’’ he said.

The government has denied that it is “caving in” to the energy companies over cash rebates for household struggling with soaring fuel bills. Ministers have been accused by the unions of betraying poor families after they ruled out one off payments.

However, Environment Secretary Hilary Benn said that the energy saving measures promised instead would offer a more “long-term” solution to rising prices.

Mr Benn told the BBC: ”Nobody’s caved into anybody.

“We are continuing to discuss with the energy companies what further help - I think it is only fair and right - that they should give to assist people with their energy bills this winter. And we will be making an announcement next week.

“So people I hope will look at the help that’s already available and then when we make an announcement next week to see what further assistance there is.

“The really important thing is that we do concentrate on helping people to get those bills down for the long term, permanently and that makes a lot of sense.”

However Tony Woodley, from the UK’s largest union, Unite, branded the decision to rule out the handouts a “downright disgrace”.

He told BBC: “This is no longer about lagging the lofts; this is about looking after people who are going to be in very serious trouble to heat their homes.”

He said the government should introduce a windfall tax on the energy giants or go “even further”.

“We need to legislate to cap these prices rises from these greedy utilities here so that we help the ordinary family in our country - if we don’t do that then we would have betrayed our people and betrayed our party.”

The government has been accused by opponents of allowing speculation about a one-off payment to run wild over the summer, after a senior official was overheard discussing the plan on a train.

Ministers were thought to have been pushing the energy companies to fund a £1bn cash rebate programme.

Fabian Hamilton, a Labour backbencher, warned ministers they would lose support from people who need help paying bills.

“The consequences for Gordon Brown and the government could be very serious indeed,” he said.

“They could further lose support from those people who look to the government for the help that they need right now.”

He added that support from Labour’s strongest backers “might fade away considerably”.

In a speech on Thursday to the Scottish Confederation of British Industry, Prime Minister Gordon Brown said there would be no “short-term gimmicks or giveaways”.

He said the government was working with utility firms “to address the problems caused by the impact of world oil prices on gas and electricity bills”.

Mr Brown also said he was “cautiously optimistic” about the state of the economy.

According to research from Barclays, the stock of small businesses in England and Wales look likely to drop by as much as 150,000 by early 2010. The bank says this is due to tighter credit and tougher trading conditions.

Richard Roberts, head of small and medium-sized enterprise analysis at Barclays believes that the stock will fall by up to 150,000 “in the course of the downswing”.

“Growth has already stopped – closures have been higher than start-ups for some time,” he added

Mr Roberst forecast covers venture large enough to have business bank accounts. These have risen in number to about 2.85m in response to steady growth and interest rates. The prediction, which Barclays will make at an enterprise conference today, is more bad news for Gordon Brown, a long time champion of the entrepreneur.

Kat Callo, founder of Rosetta Consulting, a specialist property company, said: “Many young people and corporate employees who were thinking of establishing their own business are deciding not to. It is a sobering time.”

Start-ups are losing some of its glamour as high profile businesses crack under financial pressure. An example of this is one of Management Today’s top 35 young businesswomen to watch in 2006, Pepita Diamand. An ex-fashion journalist, her company Wrapit, went in to administration recently, leaving couples without gifts and guests out of pocket.

Mr Roberts does admit there will be less business failures than in the recession in the early 1990s. Company liquidations jumped by almost 15,000 to 24,000 between 1989 and 1992 as economic growth faltered. He said: “In the early nineties there was a larger number of new companies with heavy debts, which were often overdrafts repayable on demand.”

Harry Rich, chief executive of Enterprise In-sight, which co-ordinates Enterprise Week, an annual national festival, thinks that enterprise is “more important than ever in tough economic times,

“All the external drivers, such as the need to move away from an old-style manufacturing-based economy, are still there.”

As part of the package of measures designed to revive the flagging housing market, Stamp Duty is to be axed on properties costing less than £175,000.  The level at which the 1 percent purchase tax has to be paid is to be increased form £125,000, from Wednesday morning. The move applies to residential property, would save someone buying a £174,000 property £1,740.

Other measures in the package include “free” loans of up to 30 percent for first time buyers in England. If a household’s income is les than £60,000 it will be offered loans free of charge for five years on new, co-funded, properties.

Although house prices are reportedly falling at their fastest rate since the early 1990s, rising fuel costs and the global credit crunch are dampening consumer confidence.

The Communities secretary Hazel Blears is set to announce a series of proposals on Tuesday aimed at rejuvenating the housing market. She is one of several cabinet ministers putting forward plans seen as the beginning of Mr Browns “recovery plan”.

The loans system is called HomeBuy Direct, and is to be run together with “large-scale” property firms. Once the five-year “free” period is over, homebuyers will be asked to pay a fee, although what exactly the fee will be remains a mystery.

In a statement, the Department for Communities and Local Government (DCLG) said: “Not only will this help first-time buyers, but it will also support the industry by identifying buyers for their new homes.

“This will help the house building industry weather difficult conditions, so that, when the market recovers, they are ready to expand and get back on with building the new homes the country needs for the long term.”

The government has said that for existing homeowners who can no longer afford mortgage payments, councils and social housing landlords can pay off the debt and instead charge tenants rent “at a level they can afford”.

The DCLG also promises to “bring forward funding for social housing from existing budgets, delivering more social homes sooner”.

On Monday, the prime minister Gordon Brown said the UK faced “unique circumstances”, including oil prices trebling and the global credit crunch.

But Mr Brown said the government was “resilient in… dealing with these problems”.

He earlier denied a rift with Chancellor Alistair Darling, who had said the country was facing its worst economic crisis in 60 years.

For the Conservatives, shadow chancellor George Osborne said: “We will look at the details of these measures and we will support those that will work.

“But let’s be clear, they are not going to help the vast majority of families facing a rising cost of living and falling house prices.

“Nor do they amount to the first instalment of the economic recovery plan we were promised.

“I suspect that what we will see in the coming weeks is a desperate and short-term survival plan for the prime minister rather that the long-term economic plan the country needs.”

Liberal Democrat leader Nick Clegg said: “This looks like a hotchpotch of measures thrown together to save Gordon Brown’s political skin.

“The social housing stock could be increased far more easily by allowing local authorities to buy up unsold properties and use them for new social housing.

“Yet again the government is desperately scrabbling around for a way to fix problems of its own making.”

Gordon Brown is to unveil a multi-million pound package of measures that are aimed at reviving the housing market today.

More funds are to be made available to local authorities to help first-time buyers get a foot on the property ladder. Councils will buy repossessed and unsold properties, and offer financial assistance to borrowers in return for a stake in their homes or outright ownership.

The Treasury is also considering a postponement on stamp duty – the tax charged on the purchase of a property - for lower value homes, as well as a tax-free savings account for first-time buyers.

The prime minister is trying to recover political ground after months of declining support in opinion polls and chancellor Alistair Darling’s warning last weekend that economic conditions were “arguably the worst they’ve been in 60 years” and voters were “pissed off” with Labour.

On Sunday, the justice secretary, Jack Straw, attempted top play down Mr Darling’s comments, defending both Brown and Darling’s handling of the economy. “We’ve had a very good period of economic management and economic success which has, for sure, provided us with a really serious platform to weather these storms,” Mr Straw told the BBC.

The package will be followed later this week, or early next with measures aimed at helping lower-income households facing hardships as a result of rising fuel bills. Further measures aimed at reviving the wholesale mortgage market are being delayed by the Treasury until this autumn’s pre-budget report, pending agreement between ministers and the Bank of England.

According to the Treasury, the package could amount to around £1bn, bringing forward allocations already pledged and making available additional finance in new funds.

As Mr Darlings comments reverberate around Westminster, the Conservative government claimed the government was divided, and many within Labour believe Darlings head will roll when Gordon brown reshuffles his cabinet after his party’s conference at the end of the month.

“The problem with Alistair [Darling] is that he is disastrous in presentational terms and gives the impression of not being in control of events or responding to them quickly enough,” one Labour backbencher said.