The French Polynesian government has accused the operators of the King Tamatoa fast ferry of blackmail in the way they went about setting up their service in the Society Islands.
The government has rejected a fresh bid to grant the ferry another tax exemption, saying it is not eligible and describing its financial woes as a foreseeable catastrophe.
The operators have said they will pull out of Tahiti at the end of the month, if they fail to get the concessions they want.
The government says from the start, the ferry owner used blackmail to get a licence and to adjust the infrastructure while now suddenly suspending all service after pocketing fares from the travelling public.
In a statement, the government says any possible profitability would have been puzzling because the ferry's huge fuel consumption already made to uneconomical to serve the France to Corsica route with its three million tourists.
It says 44 people are now being made unemployed for someone's choice to put an unsuitable vessel into circulation.