The chief executive of P&O Ferries had spoken of how “essential” his staff were months before 800 were sacked without notice and replaced with cheaper overseas workers.

Last summer Peter Hebblethwaite described how he would spend four to six days a month on his ships “talking to crew and listening to their experiences”. He told Ferry Business magazine: “Service is absolutely essential, therefore the people executing that service are exceedingly important.”

Yesterday P&O defended Thursday’s mass sacking but acknowledged that it “came without warning or prior consultation”. Hebblethwaite predicted the firings could halve crewing costs and wrote to remaining employees to tell them that replacing UK-based workers with cheaper overseas staff would “secure the future of our business and set it up for growth”.

Peter Hebblethwaite had said that P&O workers were “exceedingly important”

GREENE KING /REX

“It is a model that is proven to work across the industry, while still allowing us to retain service and safety levels,” he claimed.

Hebblethwaite lives in a £1.6 million Victorian farmhouse in Quenington, Gloucestershire, with his wife, Honor, 46, an interior designer. The pay of P&O directors rose to £2.6 million in 2019 from £1.2 million, according to the UK holding company accounts.

Hundreds of former crew members protested at ports as Downing Street said it was “looking very closely” at the legality of the layoffs. In Hull, a defiant P&O captain was said to have refused to leave his ship and demonstrators banged on the doors of the ferry terminal demanding to speak to managers.

In Dover, a 25-year-old worker on P&O’s Spirit of France said that he felt like his “entire life” had been ruined. An engine room worker, 49, said he found out he was sacked when his sister saw the reports.

Robert Courts, the maritime minister, admitted on Thursday that he had learnt of P&O’s decision the night before, angering union bosses who are furious that they were not told.

Grant Shapps, the transport secretary, has ordered the Insolvency Service to examine whether the company acted legally. Shapps and Kwasi Kwarteng, the business secretary, wrote to P&O Ferries, expressing their anger. Kwarteng said the company had “lost the trust of the public and has given business a bad name”, while Shapps said all government contracts with P&O Ferries and its owner DP World would be reviewed and the firm’s vessels subject to inspection by the Maritime and Coastguard Agency before sailing again.

The RMT union said that removing the possibility of government support, including through freeport contracts for P&O’s parent company, was one way to put pressure on the business.

Colin Davidson, head of employment at the London-based law firm Edwards Duthie Shamash, said P&O Ferries could face a compensation bill of millions of pounds. However, some employment lawyers said there was a possible escape route for P&O. If the redundant staff were registered as working overseas or off-shore rather than in the UK, they would fall outside the ambit of the employment tribunal.

Trucks lined up at Dover after the suspension of sailings. The company handles a significant degree of freight

PETER MACDIARMID/LNP

Louise Haigh, the shadow transport secretary, who joined a rally in Dover, described P&O’s actions as “nothing short of a national scandal”.

The Duke of Cambridge was urged to confront DP World, which is a backer of his global environmental prize. Norman Baker, the former Liberal Democrat minister, said: “Prince William did not create this situation but it’s an embarrassment to him and he can’t simply ignore it.”

P&O denied claims that its security teams had worn balaclavas or had orders to use handcuffs when escorting crew off their ships on Thursday.

As the fallout spread, the head of a quango which oversees a publicly owned company responsible for “excellence in corporate governance” resigned yesterday as a director of DP World.

Mark Russell, the vice-chairman of UK Government Investments [UKGI], said he “could not support” the mass sacking.

UKGI is an arms-length body of the Treasury that advises on all government corporate finance matters and manages government corporate assets, including Channel 4, the Post Office, National Highways and its stake in NatWest Group.

Russell, 61, also earns £150,000 a year for a three-day-a-week non-executive role overseeing government military procurement as chairman of Defence Equipment & Support.

He had been a non-executive director of DP World since 2014 and chaired its audit and risk committee since 2018. He was paid £145,000 a year for the role.

A spokesman for Russell said he had written to Sultan Ahmed bin Sulayem, chairman of DP World, to tender his resignation as non-executive director. The spokesman added: “Although he understands the need to address POFH’s [P&O Ferries Holding Ltd] financial challenges, he cannot support the way POFH has carried out this restructuring and so has no option but to resign with immediate effect.”

DP World has not taken any dividends from any of its UK operations but the Dubai-based logistics company which bought the ferry firm in 2019 declared a $275.8 million dividend last year on $1.1 billion profits. The remuneration of DP World’s directors and key management rose to $17.8 million from $15.3 million.

Yesterday Labour published analysis of data it said revealed P&O Ferries had received £38.3 million in government contracts since December 2018.

Fears over £140m hole in pensions

Protesters at the port of Hull yesterday. One person familiar with the pensions situation said that lower-paid staff would be worse hit

DANNY LAWSON/PA

Concerns have been expressed about the pension scheme for 20,000 present and former British seamen as it emerged that P&O Ferries owes it about £140 million (Patrick Hosking writes).

The Merchant Navy Ratings Pension Fund (MNRPF), an industry-wide scheme for ship workers, allowed P&O Ferries to defer paying contributions to the scheme because of its fragile position. It is understood to have made one contribution last year of £9 million.

P&O Ferries has been and is an important sponsor of the scheme, responsible for shouldering about 30 per cent of the total liabilities. Its difficulties will put further pressure on the wider UK shipping industry, which will have to pick up the tab if P&O Ferries fails as the pensions are in a “last man standing” scheme.

The Pensions Regulator is understood to be keeping a close watch on events. A spokesman said: “We are working closely with the trustee of the MNRPF in our role to protect pension scheme savers. We are not commenting further at this stage.”

The latest valuation of the £1.3 billion fund found there was a shortfall of £96 million at March 31, 2021. The buy-out deficit, the cost of making sure all promised pensions will be paid in full by handing the scheme over to an insurance company, was £283 million.

John Oldland, the chairman of the trustees for the pension fund, said: “The position at P&O has been noted and it is a cause for concern. However, because of the nature of the fund, we do not think members’ benefits are at risk.”

One person familiar with the pensions situation said: “If you’re on the bridge you’re fine; if you’re in the engine room, you could be in trouble.”