Britain's first offshore off-licence was struggling to stay afloat last night after a crackdown by customs officers.

Businessman Philip Berriman has vowed not to give in, but his partner, Trevor Lyons, has conceded that their cut-price cigarette and alcohol service could be sunk by the unwanted attention.

A customs ship has been anchored within two miles of their boat, Cornish Maiden, since it opened for business on Saturday evening.

Yesterday, as The Northern Echo went to sea to buy some goods, the ship circled the floating shop and sent a high-powered inflatable dinghy in pursuit.

Mr Lyons, a lecturer in marine law, described the incident as "sheer intimidation" and Mr Berriman claimed customs' presence was putting off potential customers.

Mr Berriman, 46, from Norton, Stockton, said: "They are stopping everybody. They really are putting the pressure on.

"But this will turn into a protest. If they want to spend hundreds of thousands of pounds, they can. But they are in the wrong. We are not giving up."

However, Mr Lyons, 54, accepted they would make little money while anchored off Hartlepool.

The pair believe they are exploiting a loophole in the law which means because they are anchored in international waters they can sell their cut-price goods because duty has already been paid on them in another EU country.

But customs officers insist booze-cruisers must declare their goods and pay UK duty when they arrive back on dry land or face losing their bargains and even their boats.

Yesterday, the skipper of the boat used by The Northern Echo, Chas Walker, was told he risked having it seized if he took further parties out to Cornish Maiden.

Members of the trip, who bought cigarettes and alcohol, had them confiscated when they refused to pay UK duty.