MoD stalls over Swan Hunter fate

THE MINISTRY of Defence is coming under increasing pressure over its delay in approving a rescue package for Swan Hunter, the Tyneside shipbuilder that is in receivership, writes Russell Hotten.

Stephen Byers, the Labour MP whose constituency includes the yard, raised the issue with the MoD yesterday. With a week to the deadline set by the yard's receiver, Ed James of Price Waterhouse, the ministry said there were still many complex issues to resolve.

Soffia-CMN, the only potential purchaser, has agreed to keep the yard open for about a year while new contracts are sought. But the agreement involves the MoD transferring the current contract for HMS Richmond to Soffia, which will then sub-contract the work back to the receiver.

Mr James said he must have the MoD's decision before 31 August or he would disband the yard's design team, vital in any future bids. The remaining 630 workers would be made redundant once existing work finished in November.

The matter is said to be on the desk of Malcolm Rifkind, the Secretary of State for Defence. But an MoD spokesman said he could not guarantee a response before 31 August. The proposed deal has been with the MoD for four weeks.