Ryanair has changed its family seating policy to allow parents to sit with their young children without paying a seat reservation fee, after an investigation was opened.

Adults travelling with children who do not wish to pay for a reserved seat will now be told of their free seat allocation after check-in, which Ryanair said was in line with most other European airlines.

Chief executive Michael O'Leary said it would "reluctantly adjust to this industry standard", but insisted its long-standing policy fully complied with laws and had given families "certainty".

It comes after the Competition and Markets Authority (CMA) said it was looking into whether the policy was unfair under consumer law.

Under the old policy, Ryanair said adults travelling with children paid one reserved seat fee, and could select seats beside them for up to four children for free.

This typically led to a fee of £8 each way, the CMA said when it launched its investigation earlier this month.

It said at the time it was looking at whether the airline's "approach to seat reservations may mean parents are being charged for the airline to meet its child safety and disability‑related obligations as set out under aviation rules – and will investigate to determine whether or not this practice is in line with consumer law".

Other airlines offered to seat children next to a parent or guardian without a fee, or allocate seats together automatically during booking for free, it added.

Ryanair said its policy had given families certainty of where they would be sitting at the time of booking, which they had valued.

It said the "free parent seats" will now be available at the back of the aircraft, as front rows tend to be reserved.

The "minor policy tweak" came into effect on Thursday, it said. It does not expect the change to have an effect on Ryanair's revenue.

O'Leary hit out at the CMA for targeting its family seating policy, which he said had been "universally embraced by consumers as the most progressive and transparent in Europe".

"Instead of promoting competitiveness and lower fares for consumers, the CMA is on a mission to force Ryanair to adopt the less transparent and less consumer-friendly family seating policy applied by most other airlines – just because it's the industry standard," he said.

The CMA has been approached for comment.

Consumer rights body Which?, who had previously highlighted Ryanair's seating policy, said it should not have had to report the "unjustified charges" to the CMA to prompt action.

Rory Boland, editor of Which? Travel, said: "It's clear Ryanair is unhappy about being dragged into doing the right thing, so Which? will be monitoring the implications of this policy and whether all parents are seated next to their children without charge over the next few months."