Transport secretary Chris Grayling has appeared in the High Court again as the government is sued over the way it awarded contracts to ferry companies as part of Brexit plans.

P&O Ferries is questioning whether the Department for Transport (DfT) was right to pay Eurotunnel £33 million in an out-of-court settlement earlier this year.

The cross-channel rail operator was given the payment in March after challenging the procurement of £100m contracts issued by the government to ferry operators - including one to Seaborne Freight to use the Port of Ramsgate.

Seaborne was awarded a £13.8m deal to run services to Ostend in Belgium but the firm's financial backers pulled out amid repeated criticism for not having any ships to operate the crossings.

The government cancelled the Seaborne contract in February and this month scrapped its other contracts with DFDS and Brittany Ferries to operate freight services across the Channel in the event of a no-deal Brexit.

P&O claim the payment to Eurotunnel demonstrates the government's "unlawful interference in a competitive market" which provided Eurotunnel an advantage over its cross-channel transport rivals.

Mr Grayling has previously defended the payment saying it was vital to make sure the UK does not run out of vital medical supplies.

He has faced numerous calls to resign for the decisions taken regarding the Seaborne saga and the latest round of Brexit negotiations leading to the case now in the High Court.

In a hearing yesterday, Michael Bowsher QC, on behalf of P&O, claimed the settlement with Eurotunnel was unfair and had not treated "similarly situated parties equally", the Mirror reported.

The ferry company wants Mr Grayling's department to terminate the deal and recover any money already paid out.

It is also requesting damages of £33m to compensate for losses which they say gave Eurotunnel a foot-up in the market by obtaining a financial boost from the government.

The government says it believed it acted lawfully when reaching the agreement with Eurotunnel.

A full trial is expected to take place in January next year with another preliminary hearing scheduled in July.

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