Swansea-Cork ferry: Fastnet Line to close service with loss of 78 jobs
The Swansea-Cork ferry service is to close with the loss of 78 jobs.
Sailings were suspended in November due to rising fuel costs but backers hoped to resume services in March.
The owners, West Cork Tourism Co-operative Society, said state aid rules and "red tape" prevented them relaunching the Fastnet Line service despite pledges of financial support.
The Welsh government said it was disappointing news but felt the rescue plan was not "commercially viable".
The ferry company - Fastnet Line - was expected to be placed in receivership or liquidation following the announcement.
The owners claimed that as well as direct job losses, the closure would cost about £17m (€20m) in lost tourist spending in south Wales and about £25m (€30m) in south west Ireland.
Noel Murphy, chairman of the West Cork Tourism Co-Operative, said: "Despite heroic efforts by staff and supporters of the ferry service in both Ireland and Wales, we are very disappointed to announce that we could not to save this vital piece of tourism and transport infrastructure.
"We would like to thank our friends throughout Ireland and Wales who relied on the ferry service, and the visitors it transported, and who pledged hundreds of thousands of euro.
"Unfortunately, these funds and the funds pledged by local councils in Cork and Kerry were insufficient to meet the required figure to achieve the proposed scheme or arrangement. Our efforts fell at the final hurdle.
"The funds were there, private and public, to allow us to continue but, despite the best efforts of all involved, state aid rules and red tape choked off the ferry's chances of sailing again in March 2012."
Mr Murphy praised the "remarkable grassroots campaign" to save the service and hoped that lessons could be learned from the experience.
"The people of Ireland and Wales deserve a better quality of service to interconnect our two communities," he said.
"If we have achieved anything, we hope that the Welsh and Irish governments will now look actively and positively at building international transport infrastructure rather than letting the recession cut people and businesses off."
A Welsh government spokesperson said it was "obviously disappointing news", but its Finance Wales investment arm had judged the proposition for additional financial assistance "was not commercially viable".
"The development of the Swansea-Cork service previously received commercial loan funding of £2.35m from Finance Wales," said the spokesperson.
"The Welsh government has remained in close communication with the Irish government on this matter."
Fastnet Line reinstated the Swansea-Cork service in March 2010 - four years after a previous operator withdrew from the route.
The company said in its 18 months of service it had carried over 150,000 customers between south Wales and south west Ireland.
In August, Stena Line announced plans to cut its fast ferry service between Holyhead and Dun Laoghaire to a seasonal service.
The company also blamed rising operational costs.