Criminal and civil investigations have been launched into the decision by P&O Ferries to sack nearly 800 workers.

The company was widely criticised for making the seafarers redundant without notice on March 17.

Business Secretary Kwasi Kwarteng said the Insolvency Service has started “formal criminal and civil investigations”.

The Insolvency Service said: “Following its inquiries, the Insolvency Service has commenced formal criminal and civil investigations into the circumstances surrounding the recent redundancies made by P&O Ferries.

“As these are ongoing investigations, no further comment or information can be provided at this time.”

P&O Ferries chief executive Peter Hebblethwaite told a joint hearing of the Commons’ business and transport committees that his company broke the law by not consulting with trade unions before sacking workers.

On Wednesday, Transport Secretary Grant Shapps unveiled a package of measures in response to the sackings.

They included plans to create “minimum wage corridors” on ferry routes between the UK and other countries.

He also urged UK ports to refuse access to boats carrying seafarers paid below the minimum wage, and asked the Insolvency Service to consider disqualifying Mr Hebblethwaite from acting as a company director.

Mr Shapps said: “I welcome the Insolvency Service’s decision to put P&O Ferries under criminal investigation.

“I have called for the P&O chief executive to step down after he shamelessly told Parliament he had knowingly broken the law, and it is right the company is held to account for its actions.

“The nine-point plan I announced this week will strengthen seafarers’ employment rights, and my department will fully co-operate with the review to ensure maritime workers are protected from anything like this happening again.”

Rail, Maritime and Transport union general secretary Mick Lynch said: “There are clear grounds to detain P&O’s ships whilst criminal and civil investigations are completed.

“Justice must be delivered for our members in the face of continued corporate hostility.”

Mr Hebblethwaite insisted the company would not have survived without taking the action it did.

He told MPs the average pay of the agency crew is £5.50 per hour.

That is below the UK’s minimum wage but Mr Hebblethwaite said this is permitted under international maritime laws.

TUC general secretary Frances O’Grady said: “This investigation must get to the bottom of what happened and not shy away from serious sanctions and big financial penalties.

“Firms who behave like corporate gangsters deserve far more than a slap on the wrist.

“In the meantime, ministers must immediately suspend all contracts with P&O and its owner DP World until crew have been reinstated.

“Regardless of the outcome of this investigation, the Government needs to bring forward its long-overdue employment Bill.

“The P&O scandal has shown beyond doubt that UK employment law, and workers’ rights, urgently need bringing into the 21st century.”