P&O Ferries is suing the government over its £33m settlement with Eurotunnel, in the latest controversy over the Department for Transport’s fraught no-deal Brexit preparations.

Botched contracts put in place to help the country ferry in vital goods in the case of a no-deal Brexit could cost almost £30m more if the UK’s departure from the EU is delayed.

The government will pay £33m to Eurotunnel in an agreement to settle a lawsuit over extra ferry services in the event of a no-deal Brexit.

The government is facing a court challenge over the contracts it awarded to three shipping firms as part of its no-deal Brexit preparations.

The government plans to pay a law firm £800,000 for advice in case Eurotunnel decides to sue over the effects of Brexit on its business.