The bosses of the world's oldest travel company were still meeting lenders and creditors in London on Sunday to try to thrash out a last-ditch deal to keep the company afloat.
United Kingdom foreign minister Dominic Raab acted as though a government bailout of the travel firm was unlikely, The Guardian reported.
"We will know by tomorrow if agreement is reached", the source told AFP.
Guests have said security staff are refusing to let people leave - even those who have flights to catch - unless they pay extra money, despite the fact they've already forked out for their holiday.
Thomas Cook India has said it is not impacted by the financial crisis faced by its former promoter and British tour operator Thomas Cook Plc.
The company said on Sunday any guests that had paid the hotel had been refunded and that new arrivals would be sent to an alternative hotel in Hammamet.
Holidaymakers said a local representative from Thomas Cook had worked late into the night before returning on Sunday morning to again deal with guests' urgent queries. "The owner and the staff locked the door, they don't let anybody out and don't let any coaches in until they are paid".
British tourists walk outside the Orange Beach hotel in in Tunisia's coastal town of Hammamet
Credit
AFP
Peter Fankhauser, chief executive of Thomas Cook, said: "After evaluating a broad range of options to reduce our debt and to put our finances onto a more sustainable footing, the Board has chose to move forward with a plan to recapitalise the business, supported by a substantial injection of new money from our long-standing shareholder, Fosun, and our core lending banks".
He said many tourists refused the demand since they had already paid Thomas Cook, so the hotel's security guards shut the hotel's gates and "were not allowing anyone to leave".
"The company must be rescued no matter what", said TSSA General Secretary, Manuel Cortes. "I'd describe it as exactly the same as being held hostage", Mr Farmer told BBC Five's Stephen Nolan Show.
"The Thomas Cook rep said he'd contacted the chief of police [about their situation]".
Shadow business secretary Rebecca Long Bailey said: "The Government faces a simple choice between a £200 million Government cash injection to save the company now versus a £600 million bill to repatriate United Kingdom holidaymakers". I urge you to stand ready to assist Thomas Cook with real financial support.
Specifically, reports have emerged from a hotel in Tunisia where guests are apparently being charged extra fees before they're allowed to leave.
"While this is not the outcome any of us wanted for our shareholders, this proposal is a pragmatic and responsible solution which provides the means to secure the future of the Thomas Cook business for our customers, our suppliers and our employees".
