Competition watchdogs have raided the offices of cross-Channel train and ferry operators to investigate price-fixing allegations, reports The Independent.

Officials from the European Commission arrived un-announced at the Eurotunnel headquarters in Folkestone and at P&O’s London and Dover offices. A spokesman for the Commission said that its investigators were examining "suspected cartel agreement and related illegal practices concerning fixing of prices".

The inquiry, now at an informal stage, covers passenger and freight services, and may extend to other ferry services. The Commission also wants to establish whether there is any evidence of "market share agreements" between the rival operators – that is, an agreement between supposedly competing companies over the amount of traffic each carries.

Crossing the channel by ferry has been described as one of the most expensive sea journeys in the world. But the companies are complaining that cross-channel revenues are under pressure as prices fall. In the first half of 2003, Eurotunnel’s income from its shuttle service fell by 11 per cent as prices dropped.

P&O indicated recently that "aggressive discounting" had stimulated some growth in the early summer, but tourists were paying much less than last year.