Chris Grayling has defended the decision to award a £13.8m contract to charter extra ferries in the event of a no-deal Brexit to a company that has no ships.

The transport secretary said he would “make no apologies for supporting a new British business” after coming under fire for handing out a lucrative contract to Seaborne Freight, a firm that has never previously operated a ferry service.

New contracts, published quietly on Christmas Eve, reveal Whitehall officials warned that a “situation of extreme urgency” exists in “roll-on roll-off” ferry capacity if the UK leaves the EU without a deal.

It then emerged that Seaborne Freight had never run a ferry service, despite being one of the three companies awarded £107.7m agreements to ease pressure on the important freight routes between Dover and Calais.

Mr Grayling told BBC Radio 4’s Today programme: “It’s a new start-up business, government is supporting new British business and there is nothing wrong with that.

“We have looked very carefully at this business, we have put in place a tight contract that makes sure they can deliver for us. I don’t see any problem with supporting a new British business.”

Asked how the government knew the firm could run an effective service, he said: “The reality is this has been looked at very carefully by a team of civil servants who have done due diligence on the company and reached a view they can deliver.”

Mr Grayling said the company was “on track to run services from April” and it would help to provide a “bit of extra capacity” in the event of a no-deal Brexit.

Documents revealed that the Department for Transport had signed £107.7m agreements with French firm Brittany Ferries, Danish company DFDS and the UK’s Seaborne to provide additional crossings.

These new routes would be equivalent to around 10 per cent of all traffic on the Dover Strait, and will use other ports including Poole, Portsmouth, Plymouth, Immingham and Felixstowe.

Seaborne said in a statement it had been working since 2017 on plans to reintroduce ferry sailings from Ramsgate from early 2019 and has been “financed by the shareholders” during a development phase.

The company said this had involved “locating suitable vessels, making arrangements with the ports of Ostend [in Belgium] and Ramsgate, building the infrastructure – such as bunkering – as well as crewing the ferries once they start operating”.

It added: “It was intended to start the service in mid-February but this has now been delayed until late March for operational reasons.

“This coincides with the Department for Transport’s (DfT) freight capacity purchase agreement with Seaborne which is part of their preparations to increase ferry capacity in the unlikely event of a no-deal Brexit.”

Liberal Democrat MP Layla Moran, a supporter of the Best for Britain campaign, told The Independent: “This has descended into farce.

“Supporting new business is one thing, awarding a multi-million pound ferry contract to a company with no ships is quite another.

“If Chris Grayling is serious about supporting new British business he might wish to reconsider his position on the damaging Brexit his government is pursuing and give the people the final say.”

It comes as MPs are gearing up for a Commons showdown over Theresa May’s Brexit deal in the coming weeks, with the prime minister facing intense pressure to win fresh concessions from Brussels.

The original meaningful vote was pulled at the last minute in December in the face of near-certain defeat, triggering an unsuccessful no-confidence vote in Ms May from her backbenchers,

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Foreign secretary Jeremy Hunt told the Today programme: “We have a clear opportunity to leave the EU on 29 March.

“It has the vast majority of things that people wanted, not absolutely everything.

“The question is, can we turn this into something that gives us absolutely everything we wanted, and I believe we can.