Tourism in the North East and Norway will be hit by a decision to scrap a passenger ferry service from Tyneside to Scandinavia, it is claimed.

Almost 350 jobs will be lost when DFDS Seaways scraps the service from Newcastle to Norway in September.

The company blamed soaring oil prices and the economic downturn.

Officials in Bergen described the move as “a disaster”, while it is predicted the North East economy will miss out on £10m a year from foreign tourists.

Ole Warberg, director of tourism for Bergen said: “The British market has been the biggest for us for the last five or six years, with about 200,000 visitors every summer.

“If this route stops it will be a total disaster for Bergen and the Fjord region.”

Andrew Dixon from the NewcastleGateshead Initiative (NGI) added: “Clearly this is bad news. It will mean about £10m off the economy of incoming visitors to the North East, which is a significant amount.

“It will have a particular effect on retailers, because a lot of the Norwegians come over to use our shopping centres, like the MetroCentre.

“There is no doubt about it, DFDS produce very large volumes into the city of Newcastle and surrounding area.”

The last sailing will take place on 1 September. The company’s service from Newcastle to Holland will continue.