A row over a possible amber travel watchlist has erupted after it was criticised by some Tory backbenchers, the travel industry and Labour.

The government is set to announce changes to the system this week, including a new amber COVID watchlist of countries which could move to the red list with little warning.

Travellers returning to the UK from red list countries have to pay £1,750 to stay in hotel quarantine for 10 days.

Spain is understood to be one of the countries being considered for the list, which could cause problems for up to a million British tourists currently on holiday there.

There are concerns Greece and Italy could follow.

The possible amber watchlist will come shortly after passengers coming from amber list countries but vaccinated in the US or EU were allowed to avoid isolating for 10 days from Monday. Those vaccinated in the UK were already allowed to avoid self-isolation from amber list countries.

The upcoming announcement has caused a row within government, with Huw Merriman, the Conservative chairman of the Commons transport committee, saying an amber watchlist is a “giant red flag” and would cause booking cancellations and complications.

Chancellor Rishi Sunak is understood to have written to Boris Johnson to warn that the UK’s travel restrictions are “out of step” compared with other countries.

But Matt Warman, minister for digital infrastructure, said the travel watchlist provided people with information to make “informed decisions”.

He told Sky News: “People do have to make common sense judgements and that may involve taking into consideration the fact that a country’s rates may indeed be getting worse.

“The most important thing that the government can do is make sure that people have as much information as they possibly can; that they have information about which direction a foreign country might be going in so that they don’t inadvertently find themselves having to quarantine when they get back.”

According to Times Radio, senior industry figures said the government was “tying itself in knots with these inexplicably complicated rules”.

Travel industry bosses said tens of thousands of jobs were at risk in the aviation and travel sectors because of government changes to the lists.

Heathrow chief executive John Holland-Kaye told Sky News: “I think we need to keep it simple and build confidence that vaccination works.

“I’d like to see France coming back on the amber list and an extension of the green list.”

Airlines UK chief executive Tim Alderslade said placing France on the “amber-plus” list was a “total disaster” after ministers revealed the change was prompted by a surge in Beta variant cases on the French Indian Ocean island of Reunion.

Everyone arriving from France, including those who are fully vaccinated, must self-isolate for 10 days.

A group of UK airline bosses, including from British Airways, Virgin Atlantic and Ryanair, has written to Transport Secretary Grant Shapps calling for the government to reduce the “still onerous and increasingly disproportionate burden of testing on travellers” and to move more countries to the green list – which does away with the need to quarantine.

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Labour’s Anneliese Dodds told Sky News the UK was “in a chaotic situation” and called for the government to release data for countries being moved around the travel list.

“It looks like yet again the government is in disarray even over that, some are for it and some are against it,” she said.

“Why can’t we provide holidaymakers with the data?

“I don’t understand why the Conservative government are so reluctant to do that.”