The firm faced increased competition this summer

The company, which carried about 400,000 passengers between the Channel Islands and St Malo last year, is believed to be heavily in debt and needs almost �3m to survive.

A French court has given the firm a three-months to get its finances in order, or face liquidation.

Emeraude managing director Pierre Legras said the introduction of competition in March to carry cars between Jersey and St Malo, was being blamed.

It has left a very bad taste in the mouth... It killed us Pierre Legras

Previously only Emeraude had been permitted to carry cars and passengers to St Malo direct from Jersey and Guernsey.

Mr Legras told BBC Radio Jersey reporter Tim Finan: "It has left a very bad taste in the mouth... It killed us."

Chief executive Gordon Forrest, said: "We are extremely disappointed that the authorities have not taken on board what we have been saying.

"We are particularly disappointed that the Jersey competition authority's study wasn't allowed to be completed because that would have shown very clearly that there was not enough traffic on the route for one operator."

Fares rise

The financial problems mean that Guernsey is to lose one of its ferry links with France with Emeraude pulling out this winter for the forseeable future.

Deputy Mike Torode, President of Guernsey's Transport Board, said Emeraude had admitted it had a difficult season in a meeting a week ago.

But he said the Channel Islands could not be held responsible for the introduction of competition, because they had to introduce it under international law.

He said: "The Emeraude situation clearly demonstrates that where you have restricted possibility for growth then competition isn't necessarily a good thing.

"You get some short term gain, but, I would suggest, long-term pain."

He believes it is inevitable that fares will now go up.

Emeraude staff threatened not to allow the Solidor 5 to sail to Jersey on Thursday night.

But the ship sailed on time after the staff got assurances that their jobs are safe for now.