Under European Union rules that the UK currently follows, customers can only do so for flights delayed by three hours or more - limited to £220 for flights of 1,500 km (932 miles ) or under.

The government said it was able to propose changes following Brexit.

It is considering a move to the system used by rail and ferry operators, which links compensation pay-outs to the cost of travel.

Under the Department for Transport's plans, passengers would receive 25% of the ticket price for a delay of one to two hours.

That would rise to 50% for a delay of two to three hours and 100% for a delay of more than three hours.

The DfT is also planning to require airlines to pay the full cost of repairing or replacing wheelchairs and mobility scooters lost or damaged during domestic flights.

Currently they are obliged to pay up to about £1,200 even though some wheelchairs cost more than £25,000.

The proposals also include forcing airlines operating in the UK to sign up to an alternative dispute resolution (ADR) scheme, which could help more people receive refunds and compensation without having to go to court.

Membership of the scheme is currently voluntary for airlines.

Mr Shapps said: "People deserve a service that puts passengers first when things go wrong, so today I've launched proposals which aim to bolster airline consumer protections and rights.

"We're making the most of our Brexit dividend with our new freedoms outside of the EU, and this review will help build a trustworthy, reputable sector."

Rocio Concha, director of policy and advocacy at consumer group Which?, said trust in travel had plummeted during the pandemic "when some airlines ignored their legal obligations and refused to pay refunds for cancelled flights".

She added: "This consultation is a welcome first step that must improve and strengthen consumer rights and protections so that complaints are dealt with fairly and promptly, and that passengers receive the money they are due quickly and without unnecessary hassle."