Shipyard fate in balance: Swan Hunter receivers in talks with MoD

THE FUTURE of the Swan Hunter shipyard remained in the balance last night after crisis talks between the Ministry of Defence and the receivers, writes Marianne Macdonald.

After almost eight hours of discussions at Whitehall, Price Waterhouse, the receivers, said the MoD was 'approaching the problem very positively'. But it was still unclear whether job losses would be made.

A statement by Mark Homan, the leading receiver at Swan Hunter, said: 'It will be apparent from the fact that the receivers have been at the Ministry of Defence all day that the matter is extremely complex.

'We have had a very constructive reception from the MoD as our principal customer. They are approaching the problem very positively. However, there are a number of hurdles still to overcome.'

Receivers were also meeting Department of Employment officials last night in talks aimed at securing the short-term future of the Wallsend- based warship builder, where 2,200 jobs are at risk.

A further 5,000 jobs in local companies and service industries are estimated to depend on the yard.

Discussions are understood to have centred on arrangements for Swan Hunter to continue work on an order for three Type 23 frigates.

Mr Homan said he hoped to make a fuller statement on the discussions by tomorrow night.

The receivers were appointed on Thursday by Lloyd's, the shipyard's bankers, after the loss of a crucial pounds 170m order for a Royal Navy helicopter carrier to VSEL in Barrow and Kvaerner Govan on the Clyde, whose joint bid was pounds 50m lower.

The Prime Minister is to meet Stephen Byers, Labour MP for Wallsend, for talks about the shipyard, and the Commons defence select committee to examine the controversy over the rival helicopter carrier bids.