Budget airline Ryanair has backed down after initially refusing to compensate passengers who booked alternative flights when they had been told theirs were cancelled.

The firm had quoted EU regulations to point out it is “not obliged to provide any monetary compensation or the reimbursement of expenses” despite admitting technical issues showed the flights were cancelled.

Steve Gray complained after he moved swiftly to book alternative flights after seeing the word CANCELLED displayed across his return bookings from Bournemouth to Tenerife for November.

He booked flights with Tui to ensure he, his wife and his mother-in-law could still enjoy a much-needed holiday. Hours later Ryanair said a web glitch had been responsible and that the flights were not cancelled. But he had already forked out around £700 because the original notice on his Ryanair bookings offered the option of a refund.

Until yesterday afternoon Ryanair had refused to reimburse Mr Gray.

However after the Echo's sister paper the Daily Echo contacted the airline about the situation, Mr Gray was told by the airline that he would be entitled to the refund.

Mr Gray, who works for Tapper Funeral Services, had planned to take civil action against the airline following their initial response to his formal complaint.

A letter from Ryanair said: “We sincerely regret the website technical issues, which has shown your flights are cancelled. We regret to inform you that there were no delay/cancellation/diversion on your booked flights and due to this fact in addition with the EU261/2004 Regulation we are not obliged to provide any monetary compensation or the reimbursement of expenses you have encountered.

“In that case we are not in a position to refund your flights.”

Yesterday afternoon Mr Gray was told he could receive a full refund for his Ryanair or Tui flight.

Mr Gray said: “To go from the situation in the morning where they were adamant about not giving a refund to this is quite remarkable.

“It should never have got to this point. You keep hearing it is a generic email or a computer glitch, but it is not good enough.”