Eurotunnel has been ordered to stop running cross-Channel ferries from Dover in a major ruling from the Competition Commission.

The firm, which also runs passenger and freight train services through the Channel Tunnel, bought three ferries that used to belong to SeaFrance, now known as My Ferry Link.

Its service started in August last year, after SeaFrance went into liquidation.

But the Competition Commission has ruled the service could lead to higher prices for travellers, and has given Eurotunnel six months to stop the services.

The move throws into doubt the futures of My Ferry Link's 50 Dover workers, but Eurotunnel has today vowed to appeal.

My Ferry Link uses the same ships - Berlioz, Rodin and Nord-Pas de Calais - as the doomed SeaFrance service.

Rival operators P&O Ferries and DFDS/LD Lines had urged the Office for Fair Trading and its French counterpart to probe competition issues.

They were concerned Eurotunnel - a monopoly player on the sub-sea route - should be allowed to grab a share of the ferry market, even though the ships are leased to a third party.

P&O has invested £300m in two new superferries and still has the major share of the cross-Channel ferry route.

Previous complaints about unfair French public subsidy for SeaFrance was upheld by competition watchdogs.

Chairman of the Eurotunnel/SeaFrance Inquiry Group and Competition Commission deputy chairman, Alasdair Smith, said: "It cannot be good for competition when Eurotunnel, which already holds a market share of over 40 per cent, moves into the ferry business—particularly when it did so to stop a competitor from buying the ferries.

"Customers would lose out from Eurotunnel increasing its share even further and being able to raise prices on the tunnel services.

"In view of the current excess capacity on the Dover–Calais route, it also seems likely that one of the current ferry operators will exit in the short term if we don’t take action.

"Customers will be better off if there are two independent ferry companies competing with the tunnel than if one of the two is owned by Eurotunnel.

"By preventing Eurotunnel from operating ferry services out of Dover, we can protect the interests of customers.

But Groupe Eurotunnel has announced it intends to appeal the decision.

A statement released today condemned the Competition Commission findings "incomprehensible and seriously disproportionate".

It claimed it was "not based on any concrete facts, but solely upon a random association of virtual hypothesis".

It said the move would actually disadvantage customers, leaving just two players in the market.

"It's good for cross-Channel travellers and good for British jobs" - MP Charlie Elphicke

It also deprived the ports of Dover and Calais of significant revenues, the firm claimed.

Jacques Gounon, chairman and chief executive officer of Groupe Eurotunnel SA, said: “This decision by the Competition Commission will reduce the choice of services across the Straits of Dover to the detriment of the consumer.

"It will inevitably lead to an increase in the price of a crossing”.

But Dover and Deal MP Charlie Elphicke welcomed the move.

He said today: "It's what we had hoped for.

"I think the Competition Commission made the right ruling. We do need a free and open market on the Channel. It's good for cross-Channel travellers and good for British jobs."

He said Eurotunnel had 'too large a market share', hailing the decision as the "best deal for travellers and the best deal for British jobs."

A statement released by the Dover Harbour Board today said: "The Port of Dover will take time to properly study the decision and its implications.

"The Port’s interest lies in fulfilling its commitment to provide the best customer service as well as job security and opportunity in the local community.”