The ferry travels between Plymouth and Torpoint in Cornwall

The �15m deal for three new Torpoint ferries was not awarded to Appledore Shipbuilders.

It went instead to Glasgow-based Ferguson Shipbuilders.

The move has resulted in criticism from unions who have described it as "the economics of the madhouse".

'Clear advice'

The Torpoint Ferry Committee said if the contract had gone to Appledore just because it was a local firm it could have led to problems.

The joint chair of the committee, Councillor George Wheeler, says the Scottish company produced the best bid and not to accept would been a breach of business law.

"We received very clear legal advice that we had offered the tender on the basis of very clear criteria," he said.

"And to divert from those criteria would have put the committee in some legal difficulty."

However, Geoff Dean of Appledore Shipbuilders said: "The price is usually the issue.

"We believe our price was very close to Ferguson's and, in such circumstances, it is very difficult to accept."

Each ferry will be capable of carrying 73 cars, providing 50% more capacity than the existing ferries.