A controversial no-deal Brexit ferry contract awarded to a firm with no ships has been cancelled by the Department for Transport.
Transport Secretary Chris Grayling’s decision to award Seaborne Freight a contract worth £13.8 million had attracted widespread criticism.
The department said it had decided to terminate the contract after Irish company Arklow Shipping, which had backed Seaborne Freight, stepped away from the deal.
A DfT spokeswoman said: “Following the decision of Seaborne Freight’s backer, Arklow Shipping, to step back from the deal, it became clear Seaborne would not reach its contractual requirements with the Government. We have therefore decided to terminate our agreement.
“The Government is already in advanced talks with a number of companies to secure additional freight capacity – including through the port of Ramsgate – in the event of a no-deal Brexit.”
Brexit-backing Tory MP Jacob Rees-Mogg questioned whether Leo Varadkar’s Irish Government had any influence on Arklow’s decision.
He told the Daily Telegraph: “One has to hope that the Irish Government has not leant on or put any pressure on Arklow to persuade it to pull out.
“That would be a very unfriendly act of a neighbour to obstruct no-deal preparations and one has to hope very sincerely that this is genuinely a corporate decision.”
Mr Grayling last month defended the Seaborne Freight contract, insisting it was “not a risk”.
It was one of three firms awarded contracts totalling £108 million in late December to lay on additional crossings to ease the pressure on Dover when Britain leaves the EU, despite having never run a Channel service.
The department said it had been Arklow Shipping’s backing that gave it confidence in the viability of the deal, and that it stands by the robust due diligence carried out on Seaborne Freight.
It added no taxpayer money had been transferred to the company.
Shadow communities secretary Andrew Gwynne told BBC Radio 4’s Today: “It’s just another example of a major disaster on the hands of Chris Grayling, who actually must now really class as the worst Secretary of State ever.”