TUI UK faces paying hundreds of thousands pounds in compensation to 138 holidaymakers who fell ill after staying at a Bulgarian hotel.

The settlement, which was reached after a five-year group action, insures that GBP 300,000 in costs will be paid.

TUI admitted liability just before a two-week trial was due to begin at Birmingham County Court on Monday.

The operator said: "Thomson can confirm that it reached a settlement on four cases brought by a firm of 'no-win no fee' lawyers, regarding the Riu Miramar in Bulgaria.

"A settlement for the majority of cases in the action had already been reached a couple of months ago."

The company added: "The health and wellbeing of our customers is of paramount importance to Thomson.

"We are concerned to learn of any alleged illness or disappointment in any of our properties and can confirm that we no longer operate to the Riu Miramar.

"A number of the claims in the action are outstanding and as the matter in question is still currently subject to legal proceedings, it would be inappropriate of us to comment any further at this time so as not to prejudice future court decisions."

Guests at the four-star Riu Miramar hotel in Obzor, Bulgaria, say they had to wade through mud and silt to get to reception, faced poor food hygiene, and reported seeing frogs hopping around.

Some of the holidaymakers, including some children, say they are still suffering from symptoms of their illnesses today.

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