The number of Britons heading abroad on city breaks is set to explode this year, according to a new report.

Demand for such holidays rose sharply after the crash of the stock market two decades ago and it is likely a similar trend will be seen this year as a result of the credit crunch, Post Office Travel Services said.

City destinations that soared in popularity in 1987 following the economic downturn included Barcelona, Prague and Dublin after holiday costs plummeted.

Now the Post Office has predicted that locations in eastern Europe - such as Krakow, Tallinn, Riga and Dubrovnik - will enjoy a surge in popularity this year.

"Costs in eastern Europe are generally lower than in the western cities so the price of tourist items like drinks, meals and souvenirs should be less," commented Helen Warburton, head of travel at the Post Office.

She added those looking to holiday in the eurozone could also benefit from lower costs of living in destinations such as Lisbon and Berlin.

Earlier this year, research by the Post Office found that Portugal is the best value destination in the eurozone.

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