By Alistair Smout

LONDON (Reuters) -Port and logistics firm DP World has paused a 1 billion pound ($1.3 billion) investment in Britain after ministers criticised practices at its subsidiary P&O Ferries, Sky News reported on Friday, in a blow to the government before an investment summit.

Prime Minister Keir Starmer is hoping to use Monday’s international investment summit to pitch his goals of generating growth and providing stability that companies need to invest.

But his government’s “pro-business, pro-worker” initiative faces a stern test after criticism of P&O Ferries by Deputy Prime Minister Angela Rayner and transport minister Louise Haigh appeared to disrupt preparations for the summit.

Dubai-based DP World is reviewing the planned investment that had been due to be a major plank of Monday’s summit announcements, Sky News and Bloomberg reported. The reports also said DP World’s chairman, Sultan Ahmed bin Sulayem, had pulled out of his planned attendance at the summit.

DP World declined to comment on the reports.

In 2022, Britain’s P&O Ferries made 800 staff redundant with immediate effect and suspended crossings for the next few days, prompting a backlash from politicians and unions who criticised plans to hire cheaper agency workers instead.

P&O Ferries at the time said it had to make swift and significant changes because the business was not sustainable otherwise.

On Wednesday, Rayner and Haigh announced new protections for seafarers, and ended what they said was a loophole used by P&O Ferries. Rayner said the government was on a mission “so no employer can abuse the system”, while Haigh said the mass sackings were a “national scandal”.

In an interview with ITV News, Haigh called P&O Ferries a “rogue operator” and said she had been boycotting them for years.

Asked by broadcasters about DP World’s decision to pull the investment as a result of the remarks by ministers, Starmer declined to comment, and pointed to a raft of other investments announced by the government in the run-up to the summit.

In a statement in response to the report, a spokesperson for the government said it welcomed “P&O Ferries’ commitment to comply with our new seafarers’ legislation”.

“We continue to work closely with DP World,” the spokesperson added.

The opposition Conservative Party said the dispute showed that Labour ministers did not understand business.

“On the eve of this much-vaunted inward investment event, this is a body blow for the government,” the party’s business spokesperson Kevin Hollinrake said.

($1 = 0.7650 pounds)

(Reporting by Alistair Smout; additional reporting by Andrew MacAskill and David Milliken; Editing by Andrew Heavens and Mark Potter)