The CEO of P&O Ferries has refused to comply with the transport secretary’s demand that he hire back nearly 800 employees who were made redundant without notice on 17 March.

In an open letter to Grant Shapps, Peter Hebblethwaite wrote: “You have asked me to reverse our decision and ‘offer all 800 workers their jobs back.’ Unfortunately, this ignores the situation’s fundamental and factual realities.”

Mr Shapps wrote to the P&O boss on Monday, calling his role as chief executive “untenable” and warning that he had “one further opportunity to reverse this decision by immediately offering all 800 workers their jobs back”.

The transport secretary said he would be introducing a “comprehensive package of measures” to Parliament this week, in which he would attempt to block the action taken by P&O Ferries, including its proposed plan to pay seafarers less than UK minimum wage.

The ferry firm has come under fierce criticism from the government after knowingly breaking employment law by sacking 786 staff on the spot to replace them with cheaper agency workers.

Mr Hebblethwaite was aggressively questioned at a transport and business select committee hearing last week, in which he admitted that the company had ignored due process in axing employees without any period of consultation.

However, he staunchly defended the firm’s decision in his letter dated 29 March, writing: “We carefully considered all feasible options and painstakingly explored all possible alternatives. Still, we concluded that we had no choice but to act as we did for compelling business reasons. Had we failed to do so, we would have risked the entire company collapsing with the loss of 3,000 jobs.”

Of Mr Shapps’ demand that P&O Ferries immediately re-hire sacked staff, he said: “Complying with your request would deliberately cause the company’s collapse, resulting in the irretrievable loss of an additional 2,200 jobs.

“I cannot imagine that you would wish to compel an employer to bring about its downfall, affecting not hundreds but thousands of families.”

According to Mr Hebblethwaite, of the 786 redundant crew, 765 have “taken steps” to accept the company’s settlement offer. Of these, more than 500 have accepted and signed settlement agreements.

He claims that the business “welcomes” the government’s commitment to increasing the minimum wage for all seafarers working in British waters.

“We have never sought to undermine the minimum wage regulations. Indeed, from the outset, P&O Ferries has called for a level playing field regarding salaries on British ferry routes,” reads Mr Hebblethwaite’s letter.

“We have made this difficult decision in the knowledge that it would be highly unpopular and, for some, difficult to reconcile. I reiterate my great distress that no other options could be identified, and I profoundly regret the pain caused to so many dedicated P&O Ferries employees.

“I can further assure you that I am fully cognisant of the reputational cost to the P&O Ferries brand and me personally.”

Ignoring pressure from MPs to step down from his role as CEO, Mr Hebblethwaite concluded the letter: “That notwithstanding, I am compelled to discharge my duties for this historical company, saving the jobs of the 2,200 dedicated employees who continue working for P&O Ferries and providing for the effective operation of the trade routes upon which this country depends.”

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