killed Chandris Celebrity Cruises' plan to dedicate a ship to St. George's in 1994, industry sources told The Royal Gazette yesterday.

Chandris' surprise decision to drop its plan to send a third ship to Bermuda was announced yesterday by Tourism Minister the Hon. C.V. (Jim) Woolridge.

The company last night declined to comment, but interviews indicate a fifth regular caller in 1994 would create more supply than demand in an already highly competitive cruise market.

Rate wars were seen as likely, with the consequence of diminished revenues for Chandris.

One Government official said Chandris' decision in September to commit a third ship was based on Bermuda holding to its target of about 130,000 visitors a year.

But two new replacement ships next year -- Kloster Cruise's Dreamward and Royal Caribbean Cruise Lines' Song of America -- will add another 20,000 berths.

"When Chandris committed to this policy, it did not envisage an increase in the capacity,'' the spokesman said.

"They've been looking at this closely and re-examining the market. In the end, they decided for business reasons that they were not prepared to go with a third ship.'' One shipping agent said if Song of America remained on the New York-Bermuda run in 1994, the "market will be over-berthed. A rate war will ensue.'' The 1,412-passenger Song of America will replace the 1,012-passenger Nordic Prince while the 1,250-passenger Dreamward will replace the 725-passenger Westward .

The new arrangement should see high season cruise passengers increase to 6,000 a week from 5,000 a week this year.

In a statement yesterday, Mr. Woolridge said: "After the required four months of negotiations, Celebrity Cruises has formally advised the Government that they will not be able to secure a fifth ship for Bermuda in 1994.'' The Minister said the Government was pursuing "other opportunities with a number of cruise companies that have expressed an interest in providing'' a ship for St. George's in 1994.

"It is expected a new round of talks and negotiations will take two months to compete.'' Before Chandris exercised its option to commit a third ship, Costa Cruises, Crown Cruise Lines and Carnival Cruise Line told Tourism they were ready to commit a ship to St. George's on a full-time basis.

Mr. Woolridge said his officials had already notified shipping agents and companies about the 1994 opening.

Chandris' announcement puts some pressure on Tourism to conclude a fifth ship arrangement for 1994.

Cruise companies marketers like to have at least 15 months to prepare their marketing for a new cruise.

Yesterday, Mr. Woolridge said he was disappointed with Chandris' decision.

"The company has been a good corporate citizen for Bermuda,'' he said. "And we were hoping to extend that. Chandris has provided tremendous cooperation to bring about higher spending among their customers in Bermuda.

"It's nice to deal with the player you know.'' Since Chandris Celebrity Cruises ships began regular calls on Bermuda in 1990, it has achieved industry-leading berth occupancy rates. Its passengers are among the biggest spenders.

The company has the capacity to provide the third ship. Its Celebrity fleet includes the Zenith and its Bermuda ships Horizon and Meridian , while its Fantasy Cruises fleet includes Amerikanis and Britanis .

Chandris head Mr. Harry Haralambopolous was not available for comment yesterday.