The government is set to allocate £136,000 to Thanet council to spend on the port of Ramsgate to help planning for a no-deal Brexit - after cancelling a £13.8m contract with a company to operate a ferry service to Ofstend.

The money will be available as part of a contingency package in the event that UK fails to secure an agreement on the terms of its departure from the EU.

The news comes as it has emerged that the council is still talking to Seaborne Freight about the potential for a ferry service between Ramsgate and Ostend despite the government cancelling the contract with it.

The money is part of a funding pot to help councils with ports in their area and follows an earlier announcement that Kent councils would together receive £600,000 to prepare for Brexit.

South Thanet MP Craig Mackinlay welcomed the news although it is unclear how the money might be spent.

He said: “My understanding is that extra funding is being specifically targeted at areas, like Ramsgate Port, that will potentially have to deal with border management issues.

“I’ve always considered the likelihood of delay at the Dover-Calais crossing to be remote no matter what the outcome of the Brexit negotiations, but Thanet will do what’s in the national interest to assist with Brexit preparedness and we are proud to do so.”

The council put on hold its budget plans for the year, which included a cut of £500,000 from planned investment in the port after an intervention by the secretary of state for transport Chris Grayling.

He asked the council to allow more time for Seaborne Freight to meet its commitment to provide a service between Ramsgate Port and Ostend in Belgium.

But days later, the government was forced to cancel the contract after one of the company's key backers withdrew its support.

The council has not yet set its budget and council tax for 2019-20 but will have to do so before March 11.