FLC OF AN LR35 EXPERIENCED AN ENG FUEL CTLR FAILURE SOON AFTER DEP IN CLASS B AIRSPACE AND REQUESTED CLRNC TO RETURN LAND. HOWEVER; FO CANCELED IFR CLRNC TO GO VFR TO HOME BASE CAUSING CTLR DIFFICULTY IN SEPARATING TFC AND A POTENTIAL COLLISION WITH A KING AIR GOING IN THE OPPOSITE DIRECTION.

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WE DEPARTED TEB AT XX00 FOR TISX (ST CROIX). ON CLBOUT; WE EXPERIENCED A FUEL COMPUTER FAILURE. AFTER RUNNING THE CHKLISTS; WE ELECTED TO RETURN TEB (PLACE OF PICKUP FOR OUR CARGO). ON APCH; WE WERE CONTACTED BY OUR DISPATCHER (WHOM WE HAD MADE AWARE OF OUR SIT) AND INSTRUCTED TO RETURN TO ABE; PA. DURING THE CONFUSION OF CONDUCTING A VISUAL APCH; GOING THROUGH A HDOF TO ANOTHER CTLR; AND RECEIVING DISPATCH INSTRUCTIONS; MY COPLT BLURTED OUT TO NEW YORK APCH 'CANCEL THE IFR AND PROCEED VFR TO ABE ARPT.' THE RESULTANT CANCELLATION; TURN TO THE W AND SUBSEQUENT HDOF WERE TOO MUCH FOR THE BUSY CTLRS (AND US) TO HANDLE. NOT ONLY DID THE CTLR SCOLD US FOR CANCELING AT AN INOPPORTUNE TIME FOR HIM; WE HAD A NEAR MISS WITH A DEPARTING KING AIR (DEPARTING FROM TEB) THAT NO ONE CALLED FOR US. I MADE THE CASE TO MY SIC LATER THAT WE MAY HAVE EVEN BEEN IN THE CLASS B AIRSPACE WITHOUT A CLRNC SINCE WE CANCELED OUR EXISTING ONE PRIOR TO BEING ISSUED A VFR CLASS B CLRNC. I SUGGESTED HE DISCUSS SUCH MATTERS WITH ME PRIOR TO ACTING ZEALOUSLY AND IN HASTE.