HUNDREDS of children looking forward to visiting Santa this Christmas have had their dreams shattered after a tour operator called in the administrators.

Nortours, which organises Santa Claus tours to Scandinavia and the Baltics, has cancelled 500 bookings after being affected by difficult trading conditions.

Families planning to go on the three, four and six day tours, which include reindeer rides and snowmobile safaris, are expected to receive a full refund because the trips were protected by the Civil Aviation Authority, Atol and Abta

Philip Long, head of corporate recovery at administrator PKF, said: "Christmas is an awful time for any business to go into administration and the nature of Nortours's product - Santa Claus tours - makes this administration all the more upsetting, not only for the staff, but also for the families who will have been expecting to fly off to visit Santa in the next few days."

The company, which is registered as Finlandia Travel Agency, but operates as Nortours, was placed in administration yesterday morning, bringing to an end more than 40 years of history.

In a statement on its website, Nortours said: "We deeply regret that we have been unable to raise the minimum number of passengers to transfer these packages to another operator, therefore, none of the Santa Holidays Nortours has offered will be able to run."

Mr Long said Nortours was hit by the low number of bookings and competition on the Internet.

"We will see if there's any interest in the company but we believe there is very little to sell," he said.

Nortours, which is based in London, employs 12 staff and has an average annual turnover of £9m.

Customers wishing to make a claim are asked to call Atol, on (0207) 453 6350.