Bo Lerenius, chief executive of Stena Line, which runs the Stena Sealink service and which has recently been the subject of stock market speculation of a possible takeover bid by P&O, hit out at Eurotunnel's tactics.
"In the Channel, we had hoped that the tunnel would take its responsibility as market leader and stabilise or increase prices. However, they have decided to halve the price and we couldn't just do nothing about that, so we had to go and cut our prices selectively," he said.
Mr Lerenius also warned the price war might last a long time. "The prices that have been set are only for the high season this year and one cannot say what prices will be in 1997. But there is a risk there could be a bad price situation in 1997; however in the end the tunnel decides its own prices."
As a result, Stena has downgraded its profit forecast to "worse than 1995" when the company, Sweden's largest ferry operator, made Kr201m. The company had been expecting profits to rise this year.
Stena, which recently drew a line under its independence by stressing that its operations were not for sale "either in part or completely", has also been affected by delivery delays for its new high-speed ferries, known as HSS. Stena has high hopes for the ferries, which it claims in television advertisement can cross the Irish Sea in 99 minutes.