Michael O'Leary claimed in evidence to the transport committee that National Air Traffic Services (NATS) "collapsed their system" and the back-up, leading to disruption for hundreds of thousands of passengers.

He suggested the company responsible for providing UK air traffic control services (ATC) was ill-prepared, with engineers working from home "watching TV" to save on travel costs.

He dismissed as a "tissue of lies" a preliminary report detailing the likely cause - allegations that were later rejected by the boss of NATS.

Airlines told the committee how they learned of the system failure from NATS's counterparts on the continent, rather than the UK operator itself.

The chief commercial officer for easyJet said the first communication from NATS came only the following day, as airlines continued to scramble to deal with the fallout.

Sophie Dekkers told the committee that, like Ryanair, it had suffered additional costs worth around £15m due to duty of care rules governing the treatment of passengers.

The rules state that airlines must provide food, hotel accommodation and alternative flight options.

Mr O'Leary said it had contacted all passengers affected by email but it had been impossible to find hotels for the bulk of the people aboard the 350 Ryanair flights cancelled.

He pointed out that many were full, hotel occupancy was high given the time of year and that there were no alternatives to offer, even on other carriers, because UK air space had been so badly hit.

NATS has previously said the problem with the automated flight plan system was caused by an entry featuring two waypoints - which use letters and numbers to represent locations - with identical names.

But Mr O'Leary said he believed that NATS shut down its own system.

"We have written confirmation from other ATC [providers]. [They] said they routinely and regularly receive flight plans that have duplicate waypoints in them. So this is not something complicated.

"All of their systems are designed [so that] when they receive a duplicate flight plan like that [they] reject it, and they deal with it manually.

"This is routine. It happens on a daily basis both within NATS and in every other European ATC system.

"Yet on Monday 28th August, Bank Holiday Monday here, NATS collapsed their system at 8.30am."

He and other airline representatives made a case to MPs for NATS to be forced to repay their costs but Mr O'Leary admitted that current regulations shielded air traffic providers from financial liability.

His counterpart at Loganair, Jonathan Hinkles, said: "We can't be the insurer of last resort for everything that goes wrong in our industry."

Martin Rolfe, the chief executive of NATS, told the MPs that he dismissed any suggestion it was not prepared, saying that the "right" number of controllers and engineers were on site and that others were able to quickly help, within hours, due to the fact they could log in remotely.

He explained that the flight plan problem was "unlike any we'd seen before" and that the system had shut itself down.

He said: "It was sufficiently unusual with not just duplicate waypoints, as you may have been informed earlier, but the combination of them, the sequence of them, and it was sufficiently different that the system decided the safest course of action was to stop processing and essentially allow a human to intervene.

"That's the basis of our safety critical systems."

Mr Rolfe added: "In the event that something happens that is unexplainable, it is passed on to humans because ultimately humans are better at interpreting confusing data than computers are.

"That's what happened. As a result of that, we reduced the flow of traffic in the skies over the UK, and that is simply to make sure that the air traffic controllers can safely handle what's coming when they don't have all the information that you might otherwise expect them to have.

"Now regrettably, obviously, that results in cancellations, delays, on the very rare occasions that it happens, and this is the first time something like this has happened in over 10 years."

NATS separately told Sky News that there was no poor communication, explaining that any operational disruption from an ATC provider in Europe is immediately communicated to Eurocontrol which is responsible for passing that on to airlines.