A £33m settlement paid to Eurotunnel after a botched deal with ferry companies was little more than window dressing, according to a highly critical report by MPs.

The report says the money paid by the government was of no benefit to taxpayers and was the consequence of a rushed process to give contracts to ferry companies to provide extra capacity as part of Brexit contingency plans.

Among those who were offered a contract was Seaborne Freight, which was to have provided extra crossings between the port of Ramsgate and Ostend. However, it emerged the company had no ferries itself.

Eurotunnel threatened to sue because it had not been allowed to bid for the contracts but the government settled before it got to court.

The debacle led to repeated calls on the transport secretary Chris Grayling to resign.

MPs on the all-party Public Accounts Select Committee have warned that government contingency plans for a no-deal Brexit in October are not progressing with enough urgency.

The report says: “We acknowledge that without political certainty it is challenging but the government needs to inject direction into departments’ preparations for leaving the EU with a deal, without a deal or any delay as a matter of urgency.”

It states: “Momentum appears to have slowed in Whitehall, with preparations for the UK leaving the EU on October 31 not happening quickly enough.”

“Public benefits from the settlement with Eurotunnel amount to little more than window dressing..."

Meg Hillier, who chairs the committee, said: “The taxpayer has been landed with a £85m bill with very little to show for it following the rushed procurement of ferry freight capacity. This £33m Eurotunnel settlement comes on top of the money paid to cancel the ill-fated ferries deal.”

The committee registers concern that a government review of contingency plans that may be needed has left departmental plans in limbo.

“We remain concerned that departments’ preparations are being left too late. The window for decision-making for any departure on October 31 is short and key deadlines for decisions are passing every day.”

“Public benefits from the settlement with Eurotunnel amount to little more than window dressing. The Department needs to keep a close eye and ensure that Eurotunnel deliver what is promised.”

It recommends that the DfT should report back on how Eurotunnel commits the £33 million and what these projects will deliver.

Dover MP Charlie Elphicke said: “It is vital that Government steps up preparations so that we leave the EU on October 31, deal or no deal. That’s why I am backing Boris Johnson to be Prime Minister. Boris believes in Britain and he has committed to delivering Brexit and preparing for it properly. It also gives us the best chance of securing a good deal. Yet if we are unable to, the report notes that our top civil servant believes we will still be ready."

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