SCORES of offshore workers are to be laid off today, after completing a major contract.

Administrators at the troubled McNulty yard, in South Tyneside, last night confirmed it was making 160 staff redundant - more than half the workforce.

The South Shields yard has finished work on a section of a gas module for French firm Technip. The module, bound for Nigeria, is expected to set sail today.

Julian Whale, of administrators KPMG, said: "Following the completion of the platform for Technip SA, approximately 160 workers involved in the project are being made redundant.

"The future of the yard and the remaining 100 employees is dependent upon continuing negotiations with customers and interested parties."

The directors of McNulty Offshore Contractors called in the administrators at the beginning of this month, after a dispute for payment of the Technip contract left the company with a cash flow crisis.

KPMG reached a deal with Technip to see the module completed, but McNulty has other significant debts.

McNulty turned over £35m last year and the administrators hope to sell it as a going concern, but so far no one has expressed an interest.

Mr Whale said that selling the yard as a going concern remained his favoured option.

Earlier this month, officials at the GMB union claimed the yard had a healthy order book, running into next year.

The job losses are a further blow for the region's offshore industry.

Amec recently confirmed fabrication will not resume at its yard in Wallsend. The site was mothballed last June, after work ran out, with the loss of 500 jobs.

And Swan Hunter has warned that it will continue to shed jobs as a gap in its order book looms.

Tim James, Tyne & Wear policy manager for the North East Chamber of Commerce, said there was still hope.

"The fact that the administrators have made redundancies and cut costs to keep it running means it will live to fight another day.

"McNulty is a big employer in South Tyneside and supports a lot of jobs outside the yard, so the important thing is to keep it running.

"It is very sad that some jobs have gone, but it has to be seen as a positive.