Two children who died on Corfu were killed by carbon monoxide poisoning, Greek officials have confirmed.
The two adults are said to be 'on the road to recovery'
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.
The police are preparing to issue charges of negligent manslaughter against the hotel, the BBC has learned.
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 statement has been issued by Thomas Cook, the company the family were travelling with, which said the latest audit of the Louis Corcyra Beach Hotel showed that "the property met all of the Federation of Tour Operators' requirements".
The travel operator also said it had moved remaining guests from bungalows and given all guests at the hotel "the opportunity to move to alternative hotels if they wish".
The children's natural mother, Sharon Wood, 35, has visited the bodies of her children.
A note to Christianne from a young girl has been left at the scene
Mr Shepherd, 38, and his partner, 27, have regained consciousness but have not yet received the news of the children's deaths.
Mrs Wood and a man believed to be her husband were accompanied to the morgue by officials from the British Consul.
She then visited the hotel and is understood to have entered the bungalow where her children died, before emerging 20 minutes later and being driven away.
Hotel manager George Chrysikopoulos refused to comment on the cause of the children's deaths because of concerns over prejudicing the police investigation.
But in a statement read in Greek and translated by an assistant, he said: "The hotel management are deeply saddened by this tragic loss of life and extend their most deepest condolences and sympathy to the family for their great loss at this time.
The gas is a product of incomplete combustion of natural or petroleum gas
Blocked flues and chimneys mean the gas cannot escape and is therefore inhaled
Fifty people in the UK die each year in their homes from accidental carbon monoxide poisoning.
Inhalation reduces the blood's ability to carry oxygen which starves organs and cells
Chimneys, flues and gas appliances and heating systems should be inspected regularly
"The police are conducting a thorough investigation with which we have and will continue to co-operate."
The two children, who lived with their mother in Horbury, near Wakefield, were described as "gorgeous" by family members.
Ms Beatson's father, Stephen, told reporters the family had "absolutely no idea what had happened".
He flew with Ms Beatson's mother, Helen, to the Greek island on Friday to be at their daughter's bedside.
After they arrived, Ms Beatson regained consciousness and managed to smile - although she has not yet spoken to anyone.
Mr Shepherd, who is separated from Mrs Wood, has also regained consciousness.
Doctors say police will not be able to interview them until psychologists give the go-ahead.
A letter written in pencil from a child called Ellie was placed on a table close to the scene of the tragedy along with a small paper plate covered in yellow flowers and petals.
The message read: "Dear Christie, I hope you are alive. If you're not alive I will be very sad and Isabel too. From Ellie and Isabel."
On Thursday morning, a cleaner at the hotel in the village of Gouvia discovered the two children dead in their room, and Ms Beatson and Mr Shepherd unconscious.
The couple, from Horbury, were taken to Corfu General Hospital. The results of toxicology tests carried out on the children are due in 10 to 15 days.
The family had been taking a week's holiday for the school half-term break.
BBC correspondent Malcolm Brabant said other bungalows in the hotel have been closed as a precautionary measure but the hotel overall has not been evacuated, although it is due to shut soon as the holiday season is coming to an end.
Thomas Cook also said it was working closely with the hospital and the police to gain further information and to support the family.
It said: "Thomas Cook would like to express its deepest sympathy to the family and friends at this tragic time.
"The results of the full investigation are still to be given so it would be inappropriate and insensitive to speculate at this time."
Dimitris Lambadarious, president of the Greek National Tourist Organisation, said the inquiry would be "transparent", that he would give "psychological support" to Mrs Wood and he was satisfied the hotel did "what they could".
Nikos Georgiadis, the Greek Member of Parliament for Corfu, said his first priority was to offer the Wood family support.
He said: "We are equally interested to know exactly what happened and take the necessary steps to make sure that something like this never happens again."