Greenway Ferry and Pleasure Cruises has sold the Torbay arm of its operation to rivals the Dartmouth Steam Railway and River Boat Company.
Greenway Ferry owner Will Ford said the decision had been taken in light of changes in the market sector, price wars and lack of support from Torbay Council.
But Greenway Ferry will continue to operate on the River Dart with four passenger boats between Dartmouth, Greenway and Dittisham.
And Mr Ford said he was pleased to have 'buried the hatchet' with his competitors and looked forward to working alongside them on the River Dart as part of the agreement.
Mr Ford said his company – which grew to be the largest independent operator in the south west – was also selling the iconic Second World War heritage ship Fairmile.
Mr Ford said that after a decade operating passenger vessels in Torbay, many locals and visitors had noticed Greenway Ferry and Pleasure Cruises had not been operating in Torbay this season and were missing the sight of the Fairmile traveling across the bay and further afield to Dartmouth.
'We took the decision to withdraw all Torbay services and not start the 2015 season,' he said.
'This has not been an easy decision to make, but one which I stand by due to recent events.
'We have worked tirelessly over the past 10 years to provide an array of tourism based passenger ferry services and day excursions in Torbay and from Torbay.
'What some people may not understand is the sheer hard work by management that goes into running a 14 boat operation in addition to the yearly restoration of the Second World War heritage Ship Fairmile.
'We have worked on restoring her for five years bringing her back into service as an icon for maritime heritage.
'The behind the scenes efforts both in the summer and winter are staggering and the return does not reflect the effort especially when we are having to charge such a small amount of £1 to cross the bay between Torquay and Brixham.
'This when coupled with the new Torbay Council subsidised ferry service is certainly the deciding factor.
'Torbay Council in the past 10 years has given our company no support whatsoever.
'Trying to run a modern business to the council's 1970s business model, having to adhere to stranglehold leases and bylaws has been detrimental to a growing business.'
Now also the last remaining Second World War rescue motor launch Fairmile previously Western Lady III, has been removed from service for a second time.
Will said: 'Fairmile's home is Torbay. We returned her there six years ago and restored her so she could operate once more, at a cost of around £300,000.
'She is moored temporarily in the River Dart and we have placed her up for sale in the hope that someone will ensure this unique ship remains part of the national historic heritage ship fleet.
'Since I was a small child, I had an affiliation with this little ship and I still do. I share this with her past three owners and we will continue to maintain her until a new home is found.
'We would be willing to discuss with any interested parties ways of keeping her in Torbay as this is my primary concern for the vessel as I feel she belongs to us all, however interest has been shown and talks are going ahead for her to leave the area.
'Greenway Ferry has taken the decision to sell parts of its infrastructure to competitors Dartmouth Steam Railway and River Boat Company, with several of its vessels being sold out of the area or chartered out.
'We've kept the information as private as possible due to agreements made, however the rumours coming from people and what we have heard have been astounding – from bankruptcy to selling to Torbay Council and even that we are buying a submarine!
'This all may come as a shock to many, however, after several discussions with the management team at Dartmouth Steam Railway in relation to the effects of the new subsidised ferry, and looking at ways of working together to implement a more coherent joint service, an offer was put to me to purchase certain parts of our infrastructure.
'Dartmouth Steam Railway now have our infrastructure and I truly believe they will continue to provide value for money services.
'We've buried the hatchet and we will be working with them in the River Dart as operational partners as part of our agreement.
'We wish them our best and thank them for taking on some of our seasonal staff to continue in certain positions.'
Greenway Ferry will continue to operate four vessels in the River Dart from Greenway Quay between Dartmouth and Dittisham, providing the ferry service to Greenway on the River Dart for the National Trust.
Will added: 'Since owning Greenway Ferry my life has been a little bit in limbo and I have put 100-hour weeks in on countless occasions as have members of my family and other staff.
'Every bit of spare time was also spent not only overseeing Greenway Ferry but split between our three retail shops in Torquay and Brixham and our cocktail bar. Dropping down to four passenger boats is a breath of fresh air, as is now just concentrating on an exclusive service with no competition and having a working and talking relationship back with our main competitor.
'We can now just paddle our own canoe and don't have to fight anymore.'