The Romans called it Floralia and the Celts named it Beltane, but since medieval times it's been known as May Day, a celebration of the coming of summer complete with maypoles and morris dancing.

In 1978 it took a political twist when the then prime minister, James Callaghan, created a bank holiday to coincide with International Workers' Day and reward the workers for their long winter of toil. Now, in a highly symbolic and controversial move, the coalition government wants to cancel the May Day bank holiday and replace it with a UK Day in October.

Ministers are drawing up plans, to be announced this month, to thin out the cluster of bank holidays between Easter and Whitsun, and create a national day off work in the autumn to celebrate the "best of British". They are considering calling it UK Day, to create a nationalistic celebration akin to St Andrew's Day in Scotland.

Trafalgar Day is another option, pegging it to the anniversary of Nelson's naval victory of 21 October 1805. John Penrose, the tourism minister responsible for the plans, said he wanted to stretch the tourist season beyond the summer holidays.

Government sources insisted there were no political connotations in replacing a holiday associated with the labour movement with another flush with nationalism. But the union movement reacted furiously, accusing the Tories of having a "bee in their bonnet" about the association with International Workers' Day.

The plans will be published shortly in a tourism strategy and subject to a "national conversation" which will give unions, May Day enthusiasts and morris dancers a chance to oppose them. Penrose said: "Tourism businesses in the UK are brilliant at providing a quality experience for their customers all year round, but the government should play its part in helping them do so.

"An autumn bank holiday, possibly to be branded as a new UK Day, would not only help the industry, but also give us all a new focus for celebrating the best of what this country does, and all the things that make us a world-class nation.

"But before we try to take this further, it's really important that everyone has a chance to consider it properly. If people decide they'd rather hang on to the May Day holiday, then so be it, but we ought to consider the options in a sensible way before the country reaches a collective decision.

"A national conversation on the issue would give everyone the chance to have their say. It's the Big Society in action."

The tourism industry has lobbied ministers for years to extend the tourist seasons to the autumn half-term by creating an October bank holiday. But there has been resistance from employers in other industries to the idea of another paid day off for their workers, the option supported by unions and some Labour MPs.

An October holiday would give workers a break before the Christmas rush – and possibly delay the advent of Christmas decorations in the shops, the government believes.

Brendan Barber, general secretary of the TUC, called on the government to abandon the plan. "There is strong support for an extra public holiday as the UK has the stingiest allocation in Europe. But the last thing we need is for the government to mess around with established bank holidays that workers and businesses have built their schedules around," he said.

"A few Tory backwoodsmen have a bee in their bonnet about the May Day bank holiday because of its association with international labour day. In fact May Day is a traditional British celebration dating back to the fourth century."

The Department for Culture, Media and Sport insists the plans are "practical, not political" and are an attempt to help the tourism industry rather than do away with a piece of Labour history. "May Day is the obvious one to look at because it can fall very close to Easter. We are addressing a tourism problem that's been around for a long time," a spokeswoman said.

The tourism strategy, due within weeks, will also present proposals on whether to stop turning the clocks back in winter and how to expand the country's appeal in emerging tourism markets, for instance by making it easier to issue holiday visas to Chinese citizens.

Previously trailed proposals to scrap the star rating systems of hotels and rely more on online reviews by customers will also be fleshed out.

No changes to bank holidays would occur before 2013. This year there is already an extra bank holiday on 29 April for the royal wedding and next year an additional one for the diamond jubilee.

Andrew Rosindell, Conservative MP for Romford, said it "was a very good idea to celebrate all things British", adding that the government should move the holiday to June to coincide with the Queen's birthday. "I don't think we need a workers' day any more than we need a day for pensioners or any other group, it is silly. We need a day everybody can celebrate. If it can be for everybody it is much more inclusive."

But Morris Federation president Barry Goodman said it would damage the big May Day festivals. "People are used to the idea of the May Day bank holiday, especially in the morris world, – it would be disappointing if it stopped. October is not a very good morris dancing time," he said."The morris dancing calendar tends to end at the end of September. But it wouldn't stop morris teams celebrating May Day, most of us do it whatever day of the week it is."