PLANS to bring a £60m ship breaking yard in the region moved a step forward yesterday.

Dutch firm NV Ecodock and Tyne shipbuilder Swan Hunter are in talks over setting up an environmentally friendly centre for decommissioning vessels.

It would create an estimated 500 jobs, plus more in the regional supply chain.

Doebren Mulder, NV Ecodock chief executive, is to order a feasibility study into the scheme, after visiting Tyneside yesterday.

Swan Hunter owner Jaap Kroese said: "They went back with a good feeling about what we have shown them.

"They were convinced that we had the skills and the know-how in the North-East to decommission these ships.

"We don't see anything at the moment that is going to stop us."

Mr Kroese is leading the negotiations on behalf of the North East Marine Offshore Cluster (NEMOC), an association of 15 companies in the region.

Together, they would recycle old warships and other vessels, into craft to service the offshore industry.

The proposals centre on the former A&P Tyne yard in Walker, Newcastle, which still leased by A&P, but is part owned by Newcastle City Council.

Barry Richardson, the council's assistant head of economic development, said: "We need to be satisfied on all environmental grounds."

No one from NV Ecodock was available for comment yesterday.