A controversial no-deal Brexit ferry contract awarded to a firm with no ships has been cancelled by the Department for Transport.
The decision by the transport secretary, Chris Grayling, to award Seaborne Freight a contract worth £13.8m had attracted widespread criticism.
The department said on Friday it had decided to terminate the contract after the 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.”
Grayling insisted last month that the Seaborne Freight contract was “not a risk”.
It was one of three firms awarded contracts totalling £108m 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 DfT said it had been Arklow Shipping’s backing that gave it confidence in the viability of the deal, and that it stood by the due diligence carried out on Seaborne Freight.
It said no taxpayer money had been transferred to the company.
The shadow communities secretary, Andrew Gwynne, told BBC Radio 4’s Today programme: “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.”