The deal with Constructions Mecaniques de Normandie (CMN) was originally due to be signed at the end of March. However, Keith Hampson, the Conservative MP, asked Malcolm Rifkind, the Secretary of State for Defence, to examine the financial propriety of the Safa family, which controls CMN. There were also suggestions - strongly denied by Mr Safa - that the family had commercial dealings with Iraq.
In May the receivers, from Price Waterhouse, said they were on the point of signing. However, repeated delays have added fuel to reports that CMN's owners were under close scrutiny by the Ministry of Defence and MI6.
Fred Henderson, who runs CMN in the UK, said that MoD officials had given verbal clearance for CMN to take over construction of the two frigates being built by Swan Hunter. 'The final words were cleared on Monday,' he said. Written confirmation is expected to follow this week.
CMN will then have to finalise an agreement with the receivers before a deal is signed. 'We have a definitive contract document, with everything except the figures,' Mr Henderson said. The contract will also have to be rubber- stamped by ministers.
The deal will, however, be conditional on Swan Hunter winning an order to refit the landing ship, Sir Bedivere. It is thought to be a front-runner for this contract.
Mr Henderson said he hoped the Government would announce the winner of the Sir Bedivere bidding on 14 July, as part of a general statement it would be making on defence. If Swan Hunter does not win the Sir Bedivere contract, the frigates will be completed under the receiver's supervision, and the 900 people still employed at the yard will be made redundant in November. This will end 130 years of shipbuilding on the site and in a region that once dominated the maritime world.Reuse content