The charges are being considered against the owner of the Corcyra Palace Hotel, the hotel manager, its maintenance manager and an air conditioning technician, police sources said.

The investigation is centred around a gas boiler adjacent to the family's room and experts are now carrying out an examination on that device, as well as air conditioning and water heater systems.

A pathologist said very high levels of the gas were found in the bodies of Christianne Shepherd, seven, and her brother Robert, six.

The children were found dead in their hotel room next to their father, Neil Shepherd, and his partner, Ruth Beatson, who were both unconscious.

The children's mother, Sharon Wood (35) has visited their bodies.

Shepherd (38) and his partner (27) have regained consciousness but have not yet received the news of the children's deaths.

Pathologist professor Theodore Vouyouklais, who carried out the post-mortem examination on the bodies, said investigators believed the source was a hot water boiler in a room next to the one the family was staying in, although this theory has not yet been proved.

Engineers have been examining air conditioning, boiler systems and a water heater at the hotel. Wood and her partner were accompanied to the morgue by officials from the British Consul yesterday morning.

Beatson's mother, Helen, said:

"They were gorgeous children.

That's all we want to say." Her father, Stephen, told reporters the family had "absolutely no idea what had happened".

The pair flew to the Greek island on Friday to be at their daughter's bedside. After they arrived, Beatson regained consciousness and managed to smile . . . although she has not yet spoken to anyone.

On Thursday morning, a cleaner at the hotel in the village of Gouvia discovered the two children dead in their room, and Beatson and Shepherd unconscious.

Guests at the hotel told how they recalled seeing Robert collapse at breakfast on Wednesday and that the family had complained of feeling "woozy".