Guests say their holiday was ruined after they developed sickness, diarrhoea and severe stomach pains. Salmonella poisoning has been confirmed in some of the cases.
It is the fourth year running that the Holiday Village Hotel in Sarigerme, previously known as the Pegasus Palace, has been at the centre of health problems.
In all, 1,200 customers are taking action against holiday firm First Choice.
Almost 90 clients from Greater Manchester are being represented by Manchester law firm Pannone, who are acting for 867 clients, and scores more local people are represented by Irwin Mitchell.
Andrew Morton, of Pannone, said many of the victims - including children - had been so ill they needed hospital treatment. He said the response of some holiday tour reps had been 'completely inadequate'.
Optimistic
"We are optimistic that we will reach a settlement with First Choice, but if we don't proceedings will be started in the High Court in Manchester," said Mr Morton.
Irwin Mitchell, which has offices in Manchester, says First Choice has admitted liability in cases from 2005 and 2006.
Solicitor Clive Garner said: "Evidence clearly shows that there has yet again been a major breakdown in health and hygiene standards at the hotel, as well as a failure to assist those holidaymakers who fell ill."
Plumber Andy Humphries, from Bury, paid £3,000 for a two-week break for him, wife Diane and daughters Samantha 15, and Sophie 12. He said: "I spent two days and two nights vomiting, and then I had diarrhoea for three days. I was so dehydrated I was put on a drip."
Heavy goods driver Peter Chapman, his wife Samantha, and children Joshua 10, and Lauren 8, spent two weeks at the Holiday Village last August.
Mr Chapman, from Denton, said: "It was a nightmare. The trip was to celebrate my 40th birthday, and it was the first time we had been abroad.
"After two days I came down with sickness and diarrhoea. I was ill for eight days and during this time one of the children was taken ill, and then my wife."
A spokesman for First Choice said the health and safety of customers is its primary concern.
He said: "Aside from confirming that initial findings at the time confirmed the low level of sickness to be down to an airborne virus, the ongoing legal action prohibits any further comment.
"We would like to reassure customers that every effort is taken to safeguard their health and wellbeing.
"First Choice closely monitors all the hotels to which it operates to ensure that the health, safety, hygiene and comfort levels our customers expect are maintained.
"We are confident that guests due to travel there will experience the high levels of quality and standards they expect." Tweet