MDHC would have received rental from the scheme, which the Government hoped would ease overcrowding in jails and police cells in the North-west.
But the Home Office says the accommodation crisis is over and plans for a floating prison have been put on the back-burner.
Mr Furlong said yesterday: 'There were talks but the prison ship is not going ahead. As far as I am concerned it is a dead issue.'
Announcing MDHC's interim profits up 40 per cent, Mr Furlong also warned some ports could go bust. 'Within five years a major port will close. They charge uneconomical prices.'
MDHC, which owns the 2,000 acres making up Liverpool's port and three miles of the Mersey river to Birkenhead, reported profits of pounds 7.6m ( pounds 5.4m).
Last time, MDHC had to write off pounds 700,000 deposited in the collapsed Bank of Credit and Commerce International. This time the company benefited from pounds 590,000 in profits contributed by its recent purchase of Coastal Container. But the half-year figure still represents organic growth of about 14 per cent.
Turnover was up 44 per cent to pounds 42m, and cargo handled by the Port of Liverpool rose nearly 2 million tonnes to 12.9 million.
Mike Stoddart, of Charterhouse Tilney, revised his full-year forecast from pounds 15m to pounds 15.7. The interim dividend is 3.3p.Reuse content