A minister has confirmed the government is considering a new “amber watchlist” category of countries for overseas travel, despite growing anger over the UK’s traffic-light system of Covid controls.

Digital minister Matt Warman told SkyNews that there would be “a spectrum of countries ranging from green to red”, each with different levels of risk for holidaymakers or those visiting family and friends.

Transport secretary Grant Shapps is due to give his latest three-weekly update on the travel list this Thursday, amid fears that he will name more countries deemed to pose a risk from the Beta variant of the virus.

But there is an increasing backlash from Tory MPs, Labour and travel industry figures who say the system is chaotic, confusing and costly.

There is particular worry that an “amber watchlist”, which would put a country on notice that it could quickly go red with compulsory 10-day hotel quarantine, would ruin planned trips to holiday destinations like Spain and Greece this summer.

Under current rules, travel from a green list country is quarantine free, travel from an amber list country is quarantine free for all those who are double-jabbed.

France was last month controversially put in a new category of “amber plus”, which means even double-jabbed travellers have to quarantine at home for at least 5 days.

There is already a green watchlist category, which means a country can at short notice be moved into the amber list, and a new amber watchlist would bring to six the number of different colour categories.

Warman said that the public could actually benefit from moving to a system where there were “not simply three cut and dried categories” of just green, amber and red.

“I don’t accept it is complicated in a way that is not something that people can apply their common sense,” he said.

“Saying to people, if a country is on a watch list there is a risk that it could for instance move from green to amber or amber to red, seems to me to be providing people with really important information when they’re making significant financial decisions because people are of course really keen to get away for a holiday if they can.”

Asked about the confusion caused by the proposed six different categories for countries, Warman replied: “I think you’re going to be hearing more from the transport secretary later on this week about the details of that and I didn’t want to preempt those announcements, but what you’re describing is a spectrum of countries ranging from green to red.

“And I think providing people some indication of the fact that it is not simply three cut and dried categories, actually is giving people more information, it’s helpful information, and it’s what allows them to make some really important decisions.

“The point of the watch list that you refer to is to try and give people a sense of the direction of travel that a country is going in, it’s to try and provide people with as much information as possible when they make those decisions about where they might want to go on holiday.”

But Huw Merriman, Tory chairman of the Commons transport committee, told BBC Radio 4’s The Westminster Hour: “An amber watchlist will be viewed as a massive red flag which is likely to cause bookings to those countries on that watchlist to collapse.

“In my view, we don’t need any more uncertainty, complexity, or anxiety for passengers, or this beleaguered sector. It just needs clarity. I would urge the government not to do anything with it.”

The Sunday Times reported this weekend that Chancellor Rishi Sunak wrote to Boris Johnson to warn that the UK’s entry and exit rules are “out of step with our international competitors” and are hurting the economy.

Labour Party chairwoman Anneliese Dodds warned against creating “additional confusion and chaos” through an amber watchlist.

“The problem is, right now holidaymakers just don’t know who to believe,” she told TimesRadio.

New rules allowing fully vaccinated passengers from the US and amber-list European countries to avoid self-isolation on arrival in the UK came into force at 4am on Monday morning.

But the extra categories of traffic light have prompted warnings of job losses and families losing money from late cancellations.

Travel expert Paul Charles said it would be a “disaster” if the Government introduced a new travel traffic light category.

The chief executive of travel consultancy The PC Agency told ITV’s Good Morning Britain programme: “It would be a disaster to bring in an amber watchlist on top of the amber list, the green list, the red list.

“At the moment the system in the UK is choking off recovery, and it’s not helping the sector because there’s no confidence to book because people are worried about places changing at short notice anyway.”

Airlines UK chief executive Tim Alderslade told TimesRadio: “Because of the way the Government has looked at things over the past couple of weeks with the France decision, which was a total disaster in terms of consumer confidence because people now think with amber, there’s a good chance that whether there’s a watch list or not, that they will be stranded, and that is a real dampener in terms of bookings.

“We’ve now only got six to eight weeks until the end of the summer, and tens of thousands of jobs are under threat in the travel and aviation sector.”