The Steam Packet says the breakdown of fast craft Manannan is serious - and could lead to cancellations on the Liverpool route over the next few days.
All today's crossings between the Isle of Man and Liverpool are cancelled, disrupting the travel plans of thousands of passengers.
Back-up vessel the MV Arrow is being brought into service to carry freight, so Ben my Chree can be devoted to passenger traffic.
The Packet says repair teams working on the Manannan overnight have found damage to the vessel's propulsion and manoeuvring system more extensive than previously thought.
Damaged parts will now have to removed and repaired or replaced, after Manannan suffered damage at sea last week when fishing debris was ingested.
Steam Packet Chief Executive Mark Woodward has offered sincere apologies to passengers.
He said: "Sea debris as a growing problem and unfortunately one which is entirely beyond our control."
He added: "We are doing all we can to restore normal operations as soon as possible but, as always, passenger safety is our first priority."
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