Hopes for an all-year ferry link between Newhaven and France have been dealt a blow just two weeks before the planned launch of the service.

Sea Containers, the company which owns Newhaven Port, is finalising a deal to sell it to the French region of Seine-Maritime for an estimated £15 million.

But the French are furious after Sea Containers said it would only sell if they agreed to scrap plans for an all-year passenger service between Newhaven and Dieppe.

The new freight and passenger ferry would be in direct competition with the summer service run by Hoverspeed, which is owned by Sea Containers.

The French consortium planned to spend millions regenerating the run-down harbour and set up freight trade links between England and France.

It is chartering a ship from Corsica Ferries which is scheduled to arrive in Dieppe at the end of February for the start of the service on March 1.

Work to dredge Newhaven harbour was expected to start in the next week.

But the launch depends on the sale of the port.

Intense negotiations are being held and both sides say they are still confident of thrashing out a deal.