The British government has decided to cancel a ferry contract awarded to a firm with no ships.

The startup company Seaborne Freight was awarded a £13.8m contract to run additional ferry services if the UK crashes out of the EU without a deal.

However, its backer - Irish firm Arklow Shipping - has now 'stepped back' from the deal, prompting the British government to cancel the contract.

Seaborne Freight was one of three companies to be contracted as part of planning to ease pressure on Dover port in the event of a no deal exit.

However, it emerged in December that Seaborne - which was awarded the contract to run additional freight services between Ramsgate and Ostend - had no ships.

There was fresh controversy after people began scrutinising the ferry company's website.

The company was accused of using terms and conditions replicated from a takeaway delivery website.

Seaborne Freight. No ships, no trading history and website T&Cs copied and pasted from a takeaway delivery site... (h/t @ormondroyd) pic.twitter.com/yuVnNFXjqo

— Tom Watson (@tom_watson) January 3, 2019

At the time, a spokesperson for the UK's transport department said due diligence was carried out to check Seaborne's "financial, technical and legal underpinning" before any contract was signed.

However, it's now been confirmed that the deal has been called off.

A department spokesperson explained: "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."

Seaborne Freight had previously insisted it would be ready to launch a freight service ahead of the planned Brexit date in March.