A FERRY that will work the River Tyne is to be built on the South coast - despite a North-East yard bidding for the work.

Portsmouth company VT Halmatic won the contract after submitting a lower tender than A&P Tyne, of Hebburn, South Tyneside.

Davey Hall, regional secretary of union Amicus, said: "I am extremely disappointed.

"It sticks in the craw that they are building a ship for the Tyne on the South coast."

The contract going outside the region comes at a time of job losses and uncertainty for North-East shipbuilding.

More than 260 workers have been laid off at the McNulty Offshore yard, in South Shields, South Tyneside.

Administrators KPMG are hoping to sell the business as a going concern, but the future of its remaining 100 workers is in doubt.

The Swan Hunter yard in Wallsend has also seen steady job losses as a two-year gap in its order book approaches.

A&P Tyne last year closed its Wallsend yard, with the loss of 500 jobs, and put the site up for sale in February.

The Tyne and Wear Passenger Transport Authority (PTA) approved the purchase of a replacement for its ageing Shieldsman ferry yesterday.

The 29-year-old vessel, which was built on the Tyne, carries 500,000 passengers a year between North and South Shields. It is operated by Nexus, the body that runs the Metro rail network.

VT bid £1.817m for the contract, which is believed to be several hundred thousand pounds less than the tender from A&P.

Coun Tom Hanson, a PTA member, said: "Because Nexus is publicly funded by the council tax payers of Tyne and Wear, we are obliged to evaluate tenders on the basis of Best Value, taking into account both aspects of cost and quality.

"The lowest price tender was significantly lower than the other tenders received and represented, in this case, Best Value for the new ferry."