Egypt’s tourism minister has resigned over the government appointment of an Islamic fundamentalist associated with the group behind the Luxor massacre as governor of Luxor province.

Six British tourists, including a five-year-old boy, were among the 62 people killed in the 1997 attack on the east bank of the Nile. Six terrorists belonging to the Islamic militant group Al-Gamaa Al-Islamiya slaughtered tourists at the Temple of Hatshepsut before killing themselves.

The group of which they were part has since renounced violence and established the Construction and Development Party as its political wing. The new Luxor governor, Adel Mohammed Al-Khayat, is a member of that party. He has been appointed to run the heartland of Egyptian antiquity by President Mohammed Morsi – as one of 17 new appointees who are replacing existing governors in a move which some analysts say will strengthen Islamist control.

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Tourism minister Hesham Zazou resigned because of the appointment, though it was unclear last night if his resignation had been accepted. A spokeswoman for the Ministry of Tourism, Rasha Azaizy, said: “Everyone has expressed their fears about the choice of this man. They don’t want a governor with an ultra-right religious inclination.”

While Egypt’s Red Sea resorts have seen only modest declines in tourism, visits to the Nile have declined sharply since political turmoil began two years ago. British-based tour operators believe the appointment of Mr Al-Khayat will appal prospective holidaymakers and damage the industry further.

One specialist, who did not want to be named, said: “It beggars belief that a figure with tourists’ blood on his hands has been put in charge of the very region where the massacre took place”.

In Egypt, Mr Morsi’s decision has provoked a strong reaction from key figures within the tourism industry.

“What happens in Luxor reflects on the tourist business in the whole of Egypt,” said Tawfik Kamal, chairman of the Egyptian Hotels Association.

The Egyptian Tourism Federation (ETF) – representing hotel owners, tour operators and figures from the lucrative water sports and diving industries – has called an emergency meeting in Cairo to discuss the crisis.

The organisation’s chairman, El-Hamy El-Zayat, said: “Irrespective of whether he did or didn’t participate in the 1997 massacre, he belongs to a radical group that once called for killing tourists.”

The session will take place in a five-star hotel next week, and discuss possible steps to prevent Mr Al-Khayat from continuing in his job.

Walid el-Haddad, an official from Mr Morsi’s party, defended his leader’s decision to appoint Mr Al-Khayat. “We mustn’t ignore or isolate anybody from participating in the political scene,” he said.