The Klondykers are coming: The gold rush is on again as East European factory ships arrive in Lerwick. Alex Renton reports

THE 'baked beans' are in. Thirty ships' lifeboats, dirty orange capsules with Cyrillic stencilling along their sides, are clustered at a wharf below Lerwick's bustling main street. It is a calm winter afternoon in Britain's most northerly port and the Klondykers have come shopping.

The smell of Russian tobacco follows the crowd of men and women as they wander happily up from the dock. They are deckhands, fish processors and stevedores from the armada of East European factory ships at anchor off Lerwick. Many have been at sea for three months. The heavy leather boots, thin jeans and cheap leather jackets distinguish the Klondykers as they queue outside the Clydesdale Bank, waiting to change a few of their US dollars.

But down in Commercial Street the most popular activity is window-shopping at Televidradio of Shetland. J G Rae, the jewellers, is doing a decent trade in cheap earrings and gold crosses, but Klondykers earn only about pounds 80 a week including bonuses. So their money goes mainly on low-cost comforts - Valeri from Murmansk opens his carrier bag to reveal oranges, apples, a single can of Chieftain lager and an artist's paintbrush.

Their spending power may be limited, but they are called Klondykers because this is a gold rush - more frantic this year than ever before. The treasure is the shoals of cheap mackerel and herring in the seas off Shetland. Eighty-eight vast factory ships are moored in the harbour. Aboard may be more than 10,000 people, doubling Lerwick's population.

These ships once sailed to the South Atlantic and the Pacific to process the catches of the trawlers. But now the broken-down economies of Eastern Europe cannot finance such long expeditions. Ships from the vast fleets of the former Soviet Union can be hired by speculators for as little as pounds 400 a day, and sent to the closest fishing grounds, the North Sea.

They are here to buy pounds 10m worth of the Shetland catch. They clean it, tin or freeze it, and then ship it to Russia, Eastern Europe or Africa - anywhere that needs cheap protein and where hygiene regulations are laxer than the EC's. In the 16th century, boats from Bremen, Lubeck and Hamburg crossed the North Sea to trade tobacco, spirits and clothing in Shetland. They took back cured fish. In the following centuries armadas of Dutch herring boats crowded the water off Lerwick.

Soviet trawlers first appeared here in the Fifties, but the factory ships moved in en masse in the mid-Eighties after the end of a ban on herring fishing, which restored stocks but killed the British market for the fish. Britain will take only 100,000 of the 350,000 tonnes of herring and mackerel the British fleet is allowed to catch this season. The rest goes abroad.

Not that any business was being done last week. 'No fish, no money, no girls, nothing to do, nowhere to go]' said Nikolay Goncharov tragically. His ship, the Stralsund from Tallinn in Estonia, has lain inactive at anchor for the past two weeks. The fish have disappeared into the Norwegian sector of the North Sea.

The 70 crew members are relaxing - asleep, watching videos, playing backgammon, or, in Captain Goncharov's case, listening to Tom Jones. In the canteen below, noodle soup, meatballs and rice are served for lunch. The crew watches the black-and-white television as they eat - it's tuned to Pebble Mill and an interview with Gordon Brown.

The Stralsund was built in East Germany for the Soviet state fleet five years ago, and is now - like many of its sister ships - owned by a private company in St Petersburg. The crew members, mainly Estonians, work for a basic wage with bonuses dependent on the amount of fish they process. The ship operates through a Shetland agent who will arrange the supply of freshly caught fish. The Stralsund processes the catch for the agent, and keeps a proportion of it in payment.

But since it arrived in Shetland at the beginning of this month, the ship has processed only 302 tonnes - four days' work. 'This is just damage for my company,' said Captain Goncharov, shaking his head as he pours glasses of Peter the Great vodka.

On the bridge, though, there is tension and ceaseless watchfulness. Though the huge ship is stable, yesterday's calm has gone. A near-gale, force seven, is blowing from the south-east. The Stralsund is at slow ahead and the helmsman must keep the bows facing into the wind to prevent the two anchors from dragging. 'Last week the anchors dragged and we moved 400 metres in three minutes before we could stop her,' Captain Goncharov said. In open sea this would be unimportant, but five other factory ships are at anchor within a few hundred yards and 25 more are in view.

The dangers of the position are illustrated by the sight of the wreck of a Kaliningrad ship, the Borodinskoye Polye. Ten days ago she tried to steam out of the anchorage in a gale and was taken by the wind on to a notorious rock, the Unicorn (named after a warship that sank on her in 1567). Tugs are alongside her trying to pump out fuel oil before it contaminates nearby beaches.

At the other end of the island of Bressay, the Klondyker ship Lunokhod lies, its bows submerged, on a rock within shouting distance of the Lerwick channel lighthouse. It dragged its anchor in November's first storm, and is now breaking up.

Nearly every day the coastguard has had to deal with Klondyker problems - injuries, collisions, fouled propellors, breakdowns on the shopping-trip lifeboats. A serious fire on another Klondyker took up more time. 'We've had a Klondyker go down with each gale so far - and we get gales here every two weeks in the winter,' said a port official.

The Lunokhod carried no insurance, so the cost of the rescue and the clean-up will have to be borne by Shetland. But Allan Wishart, general manager of Lerwick Harbour Trust, the port controllers, explained that he cannot order the ships to take better care. 'It is the master's decision. These are seafaring nations - they are as competent as the British.'

But it is clear that not all the ships are up to British standards. A team of inspectors from the Department of Transport is visiting Shetland in the aftermath of the two wrecks, and examining those ships that allow them aboard - they have no statutory right when the ship is offshore.

On Friday they announced their preliminary findings - six of the nine ships examined would have been 'detained' had they been in port. Though impressed by the navigation and seamanship, the inspectors' complaints included such things as broken-down lifeboats.

On Thursday, a Klondyker at harbour in Aberdeen was detained because of similar defects. The inspectors in Shetland said they were concerned that ships had so little fuel aboard, some for less than three days' steaming. There is little, however that the Department of Transport can do. Klondykers are given licences by the Scottish Office which permit the taking on of fish - they have no duty to show seaworthiness certificates or proof of insurance cover. So long as the Klondyker does not tie up in a British harbour, and pays its dues for anchoring, it cannot be interfered with.

Shetland, meanwhile, does not want to drive them away. Their departure would be 'catastrophic' for the local fishing fleet, said Mr Wishart. The Harbour Trust makes over pounds 250,000 from the factory ships in dues and commission.

J G Gray, one local chandler, will provide an average of pounds 10,000 of groceries to each of the 26 ships it services. Leaving aside the fish, the Klondykers inject at least pounds 2m into local businesses.

But, with the wreck of the Braer last January still in everyone's minds, Shetland is not prepared to risk any more disasters. 'We need the Klondykers here - they keep our boats going,' said Jonathan Wills, a local councillor and environmental campaigner, 'but it is not unreasonable that they should be seaworthy.'

On the Stralsund, Captain Goncharov fiercely denies that his ship is unseaworthy. But he admits that what he is doing is dangerous.

'These ships were designed for the open ocean, for the Pacific. This road (the anchorage) is very bad, there are too many rocks and the holding ground is not safe.' Should he go elsewhere? 'We have to work. Accidents will happen - we are all under God.'

(Photographs omitted)