Officers from the Department for Trade and Industry revealed the firm, which took more than £1m in sales receipts at its River Thames headquarters, made a series of misleading promises to lure unsuspecting customers into parting with cash.

Charter International and its successor Charterline ran six boats moored at Penton Hook Marina in Chertsey, Surrey, and sold more than 250 timeshares.

The firm used cold-calling to approach potential customers and invited them to attend presentations at hotels in Maidenhead and Chester.

At the presentations, sales staff claimed the timeshares were an investment opportunity, as owners could opt to rent their allocated annual weeks. The company had no means of supporting this claim.

The High Court in London also heard staff inferred that timeshare holders would own a share of a specified narrowboat, whereas in fact the timeshare was only available for a pool of craft.

Charter International continued to trade while insolvent, the court heard.

Consumer Minister Gerry Sutcliffe said: "Regulations protecting consumers have largely driven the cowboys out of the UK timeshare market.

"But holiday clubs and unregulated timeshare, for example timeshare on boats, could turn out to be nothing but a money making scam, so don't fall for pressure selling. If in doubt, walk away."

Motor Boats Monthly, 21 January 2005