Up to 650 jobs - more than a third of its workforce - are to be cut at cross-Channel ferry operator SeaFrance, it was announced on Tuesday afternoon.

Talks have been going on for some weeks to find ways to deal with the company's financial situation, and a meeting between SeaFrance bosses and representatives from its parent company, SNCF, took place on Monday.

A previous rescue plan by SeaFrance managers had been rejected by the SNCF board. It was understood that the original proposal involved 300 job losses and an injection of more money into the company.

The managers were told to think again take more drastic action.

Now they have more than doubled the number of job cuts, and have also proposed reducing the size of the cross-Channel fleet from five to three ships.

Both sea-going and shore-based staff will be affected and talks are to be held with the unions.

SeaFrance blames the situation partly on a reduction in the number of freight vehicles crossing the Channel. Managers say they want the company to break even in 2010.

The company made an operating profit in 2007 of 15 million Euros and there was expected to be a loss for 2008.

Managers say they want the company to break even in 2010.

Union officials met with SNCF chairman Guillaume Pepy and supervisory board chairman David Azema on Thursday to try to persuade them not to make wide-ranging job cuts. One union representative said they were listened to, but no promises were made. The union fears that cuts could take the company into a spiral of decline.