Ryanair could face legal action to force it to adopt more consumer-friendly policies following an EU-wide investigation into unfair practices in the airline industry.

European consumer affairs commissioner Maglena Kuneva will issue an ultimatum to Europe's biggest low-fares carrier and scores of other EU airlines tomorrow over the way they sell tickets online. She is expected to threaten to "name and shame" those airlines she believes are breaking European consumer laws and ask national regulators to take legal action unless they change their policies within four months.

The threat of legal action follows an EU-wide investigation into misleading advertising and unfair practices on airline ticket websites. The investigation, which was carried out by 15 national regulatory authorities across Europe, found half of all websites scrutinised showed irregularities.

The most common "unfair practices" identified by investigators related to price indications, contract terms and clarity of the proposed conditions.

The national investigators also uncovered instances where travel insurance was added as a default on airline company's websites, a practice that forces consumers to actively opt out of paying an additional charge for travel insurance.

"We discovered that about 50 per cent of airline ticket selling websites are currently letting Europe's consumers down," Ms Kuneva will say in a speech. "Whether you are in Brussels or Barcelona or Munich or Manchester, consumers deserve clear and fair pricing and no hidden surprises in the small print of contract terms . . . The figures released today show that there is a substantial problem in the industry."

Ms Kuneva is not expected to mention Ryanair by name tomorrow but investigators in several countries, including Spain, have pinpointed it as one of the airlines that needs to change its selling practices. Other airlines specifically named by investigators include the Dutch airline Transavia and Spanish firm Vueling.

Ryanair strongly defended its record last night and said it knew nothing about the investigation or an accompanying report, which it described as "clearly unreliable".

Ryanair's head of communication Peter Sherrard said its contract terms could not be clearer.

"Perhaps the EU should do something useful for a change and investigate the scandal of fuel surcharges including this morning's latest increase by BA who have hedged all of this year's fuel at $75 per barrel," he added.

The airline ticket selling investigation was launched and co-ordinated by the European Commission under the Consumer Protection Co-operation Regulation, which came into force at the end 2006.

Investigators from national regulators (the Irish regulator did not participate) scanned more than 400 airline websites to identify misleading advertising or unfair practices.

National regulators will contact the airlines found to have "unfair practices" from tomorrow to ask them to change their practices or face legal action that could lead to fines or the closure of websites.

INQUIRY: areas of concern

The three areas of concern targeted by the investigation:

Clear pricing: Airlines must give a clear indication of the total price in the headline price first advertised on a website; extra charges such as taxes, booking or credit card fees should be clearly indicated from the start rather than at a late stage of booking.

Availability: The investigation found that in many instances a particular special offer in reality was not available - for example just a few seats had been available. Limitations on the availability of an offer should be clearly indicated.

Fair contract terms: Contract terms must be clearly indicated, easily accessible and fair. Unfair practices include mandatory insurance attached to an offer, or situations where consumers have to explicitly opt-out of an insurance clause, rather than opt-in. Contract terms and conditions must be available in the language of the consumer.