dispute over cash.

Majesty Cruise Line says it will operate the ship alone, because its former partner Boston-Bermuda Cruising is "out of the picture''.

Majesty is even planning to demand damages from Boston-Bermuda.

And according to Shadow Tourism Minister Mr. David Allen, Boston-Bermuda has "effectively gone out of business''.

Last November, Government signed a 10-year deal to bring the cruise ship Royal Majesty from Boston to St. George's.

Boston-Bermuda, a new company, was to lease the ship from Majesty.

The first cruise is due to arrive at the Old Town on May 30.

Yesterday, Boston-Bermuda president Mr. Stanley Buchin denied his company was in ill health.

He said: "There has been a contractual dispute between Boston-Bermuda Cruising Ltd. and Majesty Cruise Line, the owner and operator of The Royal Majesty , about the details of a letter of credit required under the charter.'' He said he thought the dispute had been resolved.

"A revised charter agreement is expected to be signed early next week.'' But minutes later, Majesty president Capt. Paris Katsoufis told The Royal Gazette that Boston-Bermuda no longer had a deal with his firm.

"Boston-Bermuda Cruising is out of the picture as far as we're concerned.

They can say whatever they want, but they don't have a charter.

"We are counting the damages so we can ask them to pay us.

"But as far as Bermuda is concerned I don't think that there is any problem, because with or without Boston-Bermuda Cruising The Royal Majesty is going to be there with her regular passengers.'' Capt. Katsoufis said there could be a possibility of getting back with Boston-Bermuda, "if they come back and fulfil all their obligations, and of course pay for whatever damages or extra expenses we have now''.

Mr. Buchin failed to return further calls from the Gazette .

Mr. Allen, PLP Tourism spokesman, said reliable industry sources had revealed Boston-Bermuda had "effectively gone out of business''.

"It is our understanding that the firm has to all intents and purposes ceased functioning in Boston, and that the Majesty Cruise Line has been forced to take over all marketing efforts from its own Miami offices.'' Mr. Allen said the Opposition was "appalled'' that Tourism Minister the Hon.

C.V. (Jim) Woolridge did not mention this "serious development'' during Monday's tourism debate in Parliament.

He recalled that Boston-Bermuda chairman Mr. Arnold Mende "made many commitments to the people of St. George's and Bermuda'' at a public meeting after the contract had been signed.

"Many questions must now be raised by this latest development.'' The PLP would reveal more about Boston-Bermuda today, he said.

Mr. Woolridge said he had been assured Boston-Bermuda was alive and well.

Mr. Allen's allegations were a "storm in a teacup''.

"I didn't mention it because as far as I'm concerned it wasn't a problem then and it's not a problem now, based on my conversation with Mr. Buchin.

"The primary signatory has always been Majesty. The Government is not privy to the details of the charter agreement, but Government expects, and has every reason to believe, that Majesty will carry out the responsibilities they have undertaken to carry out.'' Mr. Woolridge said Majesty had taken on greater responsibility for marketing the cruises, particularly outside New England. It was better for an established company to do this, he said.

Tourism director Mr. Gary Phillips said: "It was always my understanding in talking with Majesty that they would, as time went on, assume a greater responsibility for marketing outside of Boston.'' Nothing had happened that he hadn't expected, he said.

A cruise industry source told The Royal Gazette : "I have heard there were some financial guarantees that were supposed to take place between Boston-Bermuda and Majesty that never happened.'' This would tie in with the disappearance of Boston-Bermuda from advertisements for the Bermuda cruises, he said.

"Reading between the lines, Boston-Bermuda doesn't exist or is going through some major changes.'' On the other hand, he had seen nothing indicating sales were not going well -- like special cheap deals. The deal to bring a regular cruise ship to St.

George's has faced many problems.

Originally, Boston-Bermuda was planned to be the main signatory to the deal with Government.

When the contract was finally signed last November, Tourism said the principal signatory was now Majesty.

Government sources said the change was made because manoeuvring during negotiations eroded confidence in Boston-Bermuda.

First, Boston-Bermuda shocked Government by saying it planned to expand the Sally Albatross -- the ship it initially planned to bring to Bermuda -- and make it larger than the Old Town wanted.

Next, financing fell through and the Sally Albatross plan collapsed.

Newspapers in Boston have reported that Mr. Mende was behind two failed shipping ventures in the city.