P&O Ferries is temporarily laying off more than 1,000 staff, taking advantage of the Government’s decision to bankroll wages in response to the coronavirus pandemic.
The English Channel operator told staff of the decision this lunchtime as it shifts towards a focus on bringing in freight to the UK.
Staff will continue to get full basic pay, with P&O topping up the 80pc of wages funded by the taxpayer through a scheme announced by the Government last week.
Passenger services between Dover and Calais are no longer sustainable in the wake of the Covid-19 outbreak following a collapse in traffic, the company said.
P&O typically carries more than 8 million passengers a year, serving several ports in the UK and Europe.
Without an intervention by Chancellor Rishi Sunak to fund furloughed staff all operations would have had to cease, the company said.
The ferry business carries approximately 15pc of the UK's urgent supplies from abroad, a third of which are fruit and vegetables from Southern Europe and North Africa.
Boss Janette Bell said: "Due to the outbreak of Covid-19, there are now very few passengers travelling and we cannot sustain these normal operations.
"Consequently, P&O Ferries will be suspending its passenger business and we will be focusing all of our efforts on maintaining the flow of freight to Britain.
“Dedicated staff in the passenger services part of our business will be furloughed onto the Government’s pay scheme. Without being able to make this decision, we would not be able to continue any of our operations.
"We will be doing all that we can over the next weeks and months to support all of our staff – furloughed and still working – through these difficult times.”