Scotland is about to lose its only ferry service to Scandinavia and the UK's only ferry connection to the Faroes and Iceland.

The Smyril Line has run a summer service from Bergen to Scrabster in Caithness since last year, when it was introduced to replace a service operated since 1983 from Shetland to Norway.

The use of the £60m super-ferry Norrona proved so popular that this year's timetable was confirmed early and in recent weeks there had been negotiations to increase the service next summer.

However, on Saturday the Faroese government had to step in to save Smyril from bankruptcy with the injection of £3.1m.

The Bremen-built Norrona is capable of carrying 1482 passengers and 634 cars and some believe it is too big and expensive to run on Smyril's chosen routes, particularly in winter.

In the summer months it sailed to Scrabster from Bergen once a week. It then headed north to Torshavn in the Faroes and on to Seyisfjrur in Iceland before returning to the Faroes and then back to Bergen.

At that time Smyril was clear it wanted to take "passengers from Iceland, Norway and the Faroe Islands directly to Scotland and send British and mainland European tourists directly from Scotland to Iceland, Norway and the Faroe Islands".

However, now the Norrona will be used for a year-round service from the Faroes to Denmark, calling in Iceland between spring and autumn only.

Sandy Mackie, Scrabster Harbour Trust manager, told The Herald yesterday that there was deep disappointment in Caithness at the news.

"It came as a total surprise. Indeed, at Smyril's request we had been working on an expanded programme for next year, extending the number of calls and also looking at the possibility of freight," he said.

"It is a reflection of both the general economic climate and Smyril's own financial circumstances, rather than a reflection on Scrabster or the Highlands.

"We have asked Smyril to reconsider because we think there is still demand and a profit to be made by coming into Scotland.

"This past summer we had 6200 people landing here which was an increase of 5% on 2007. In 2007, 1882 vehicles passed through Scrabster. In 2008, the figure was 2000 vehicles. We thought this was an encouraging performance given the general economic climate."

Nobody at the Smyril Line was available to comment yesterday.

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