Thomas Cook has approached the government in a bid to plug the gap in funding it needs to satisfy lenders.
The travel company could fall into administration this weekend unless it finds £200m in extra funds needed to secure its future.
Banks, including RBS and Lloyds, insist the firm comes up with the new contingency funds in case it needs extra money during the winter months.
A collapse would leave 150,000 UK holidaymakers stranded.
Sources insisted there were still “reasonable prospects” of a deal and suggested the government could help.
But they added that the coming 24 hours were crucial to the travel group’s survival.
“We do not speculate on the financial situation of individual businesses,” the Department for Transport said in a statement.
Currently there are 600,000 Thomas Cook customers on holiday, of which 150,000 to 160,000 are from the UK.
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The troubled operator hoped to seal a rescue led by China’s Fosun this week. But the creditor banks issued a last-minute demand that the travel company find an extra £200m.
Sources have confirmed the Civil Aviation Authority is on standby with a repatriation contingency plan called Operation Matterhorn. The potential cost of bringing home passengers is put at about £600m.
The CAA said it would not comment on the financial situation of individual businesses.
Thomas Cook, one of the world’s largest travel companies, was founded in 1841 to operate temperance day trips, and now has annual sales of £9bn.