Chris Grayling’s Brexit ferry fiasco has taken a further twist after the reported backer of the startup company with no ships that was awarded a £13.8m contract said it never had a stake in the venture.

Sources at Arklow Shipping, which operates 55 dry bulk vessels in northern Europe, said it had been in talks with Seaborne Freight twice last year, but it “never had any agreement” with either Seaborne or the Department for Transport to run a service from Ramsgate to Ostend.

The revelations came as the company behind Eurotunnel launched a high court action against the DfT, accusing the government of a “secretive and flawed procurement exercise” for the backup ferry service in the event of a no-deal Brexit.

It raises further questions over the transport secretary’s decision to award Seaborne the contract, which the government cancelled at the weekend, saying it had become clear the company could not fulfil it because Arklow had decided “to step back from the deal”.

Sources at Arklow said it had considered investing in Seaborne and providing two ferries, but saw itself as “just a prospective investor, probably in a long line of others”. When it was discovered last week that Seaborne did not have a port agreement in place in Ramsgate, it decided not to pursue talks any further.

“If you don’t have an agreement with a port, how can you run a ferry service?” the source said. “We never had an agreement with Seaborne, so when it was reported that we were a backer, that was not the case.

“Seaborne approached us a year ago and we had no further contact until the end of December. There was nothing signed, we were just prospective investors that they had approached like many others, I imagine. We had no agreements with Seaborne or with the Department for Transport.”

Downing Street said on Monday that Theresa May continued to have full confidence in Grayling, amid calls for his resignation.

The contract with Seaborne was announced at the end of December and quickly the subject of ridicule, after it emerged the company had no ships and appeared to have copied and pasted terms and conditions on its website from a pizza delivery business.

Arklow wrote to Grayling on 18 January stating it intended to provide equity finance for the purchase of two vessels and an equity stake in the project. However, in the past week, it discovered there was no deal for access to the port and decided not to proceed.

The DfT said Arklow’s backing had given it confidence in the viability of the deal and it stood by the due diligence carried out on Seaborne.

A spokesman for Seaborne said: “It is with regret that Seaborne Freight is not in a position to add any further comment, as we remain bound by a confidentiality clause with the DfT.”

Grayling is under further pressure to explain how Seaborne was awarded the contract after weekend reports that Ramsgate authorities could not afford to run the port.

Questions remain about the procurement process after the DfT relied on an emergency exemption provided for by the Public Contract Regulations 2015 to award the contract. Eurotunnel has accused the government of “anti-competitive” and “distortionary” behaviour.

Lawyers for Channel Tunnel Group Ltd and France-Manche SA, which operates the Channel Tunnel, say the contracts totalling £108m were awarded through a “secretive and flawed procurement process”. But the DfT argues the “extreme urgency” of no-deal preparations justified the process.

At a hearing in London on Monday, Eurotunnel’s barrister, Daniel Beard QC, said the procurement process for “additional capacity for transport of goods across the Channel” had been “undertaken without any public notice being issued”.

Ewan West, representing Grayling, told the judge the process was only for “maritime freight” services and, therefore, Eurotunnel “could never have provided that capacity” and “could not have complied” with the terms of the contracts.

The judge scheduled a four-day, expedited trial for 1 March, given the “obvious” urgency of the case and the “very important public interest matters” involved.