Collapse of panels under transverse loads has been reported dependent on formation of some unstable subregions surrounded by failure lines (hinges) within the panels, however such a collapse mechanism has been less investigated for the composite panels. In this paper, the significance of residual strength in the flexural failure lines around the unstable subregions through the collapse of GFRP panels was investigated. In the experimental program, the panels made of E-glass/vinylester composite laminates with various layups and aspect ratios were examined. To observe progression of failure lines in the panels due to large deflections, by application of a support composed of tubular components, the restraining influence of support on the panels was minimized. Based on well-known criteria, initiation and evolution of damage in the composite panels were simulated using the FE models. By a good estimation from the compressive residual strength in the failure lines based on the results of uniaxial compressive and three-point-bending tests, the FE models could simulate softening of the composite panels prior to collapse and temporary stability prior to complete loss of load carrying capacity. Using the FE models, contribution of various strain components in the flexural failure of the laminates and the influence of residual strength on the energy absorption capacity was probed for various configurations of the laminates.