The failure of the bid to save the yard has embarrassed Tony Blair, whose ministers appointed a task force before May's Scottish Parliament election to secure a rescue package when Kvaerner put the yard up for sale. It is one of the few symbols of heavy Scottish industry to have survived 18 years of Conservative rule in Scotland. For it to close would be politically damaging to Labour. Yesterday unions lobbied Scottish MPs and the Scottish Secretary, John Reid, at Westminster.
Hopes had risen that the pounds 1m offer by Marconi Electronic Systems, the shipbuilding arm of GEC, would secure the future of the yard. But the deal was turned down within 90 minutes. The first redundancies are scheduled for 16 July.
Sir Gavin Laird, the head of the task force, said after meeting Donald Dewar, First Minister in the Scottish Parliament, that the offer had "seemed worthy of consideration".
Kvaerner's antipathy to the deal reflected concern over a clause that would have left it responsible for redundancies for up to five years. Kvaerner suspects GEC is interested in maintaining the yard only long enough to complete an order for two naval vessels, whose production is 16 months behind schedule and which would be transferred from a GEC yard in Barrow-in-Furness, Cumbria.
Kvaerner said the GEC bid had been considerably worse than one already discussed privately with the company. "We could not accept it. Because they (GEC) are not prepared to take the prospect seriously enough to bear the cost of possible redundancies themselves it means they could go in and undertake contract work at the yard and within two years could close it down. We would still have to pick up the redundancy bill."Reuse content