Evanelpus - It's not security who are the problem but the check-in staff who are probably acting under instructions from the handling agent.
FlyZB - Thank you for your reply. I cannot speak for the charter arrangements as we only have an allocation of seats on the scheduled service ZB737. I have spoken to Monarch in Luton and they have confirmed that passengers checking in at AGP for Monarch flights should not be restricted with their hand luggage other than the usual sharps, etc. They did say that they would speak to the handling agent so hopefully the pax will not be inconvenienced again.
Nivsy - As expected, as things are at the moment you will not have any problem with hand luggage on your flight AGP/MAD/MUC.