by business editor Trevor Sturgess

P&O Ferries has vowed to contest any attempt by the French authorities to use state aid to prop up the ailing cross-Channel operator SeaFrance.

SeaFrance, which suspended services between Dover and Calais today because of trade union action, is in administration and faces a court hearing in France tomorrow over its future.

The European Commission said last month that that the firm had been propped up illegally by the use of some £190m of state aid from its parent SNCF.

Two bids have been made for SeaFrance, one by a joint venture of DFDS and LD Lines, and another by SeaFrance staff and a union co-operative.

It is understood that DFDS/LD has offered just £4.25m, while the employee deal would involve a purchase price of just 85p. Yet a court hearing valued the SeaFrance fleet at up to £140m.

P&O Ferries has complained to Brussels amid concerns that the French authorities may sell SeaFrance assets at less than fair market value. It says this would constitute a continuation of illegal state aid.

"It would be totally unfair for the assets of a bankrupt company to be passed to another ferry competitor for a pittance and P&O Ferries will vigorously defend its position," said P&O Ferries chief executive Helen Deeble.

"The ferry market should operate on a level playing field without illegal subsidies. The European Commission has already ruled that the subsidies paid to SeaFrance are illegal. It cannot stand by and allow the ships to change hands in a way that allows such a deal to continue distorting competition."