SHIPBUILDING is a risky business. Yards have a hand-to-mouth existence, surviving, often by the skin of their teeth, from one contract to another.

The North-East knows this all too well. Six years ago Swan Hunter, the region's most famous shipbuilding name, gambled its entire future on winning an order to build a warship. It lost, and was sunk without trace.

Cammell Laird, the most famous shipbuilding name in the North-West, assumed the mantle when it took over Swans' former Hebburn yard on South Tyneside two years ago, promising to return big-time shipbuilding to the North-East.

Last night, that dream lay in tatters when Cammell Laird called in the receivers. Like Swans before it, it was destroyed by the big order that got away.

The writing has been on the wall since Cammell was robbed of a £50m contract to extend a cruise liner for Italy's Costa Crociere. The liner was ordered to turn back on its way into the Mersey docks, with a new mid-section built at a cost of £40m waiting to be fitted.

With the order lost forever, and no imminent sign of compensation among all the bitter recriminations, Cammell was bound to crumble under a mountain of debt.

Today, as the receivers move in, the 800 Cammell Laird employees on the Tyne, Tees and Wear will be wondering if they still have their jobs.

It is inevitable that there will be cutbacks. As part of its frantic efforts to re-finance the business Cammell Laird was seeking to shed 500 jobs. The receivers may be more ruthless.

There are, however, some reasons for optimism and that the business, in one form or another, will survive.

Still in the wings is a potential £344m contract to build two 28,000-tonne, 400-berth, luxury cruise liners for the US shipping company, Luxus.

Trade and Industry Secretary Stephen Byers had already agreed to help Cammell win the contract for the new ships, but because the British Government has set limits on cash subsidies for the order, the deal was awaiting confirmation.

Mr Byers will now come under intense political pressure to fast-track subsidies to secure the order and keep the yards afloat. Ahead of a General Election the temptation may be too great for him to resist.

With such a contract in the bag, the receivers will have a much easier job to find a buyer willing to offer some medium-term security to the workers at the yards.

As they left the North-East yards last night employees were clinging to hopes that a rescue deal may be in the offing.

Sunderland shipwright Gary Smith, 37, who is married with an 11-month-old baby, reacted to the receivership by saying: "This is very bad news. If that means they are going to shut, then that's it, but normally they will try to sell the company as a going concern.

"As a dad and a husband I feel very worried."

And there were already signs of pressure building up on the Government to intervene.

John Edmonds, general secretary of the GMB union, said: "Obviously the workforce will be very concerned by this announcement, but we are confident that shipbuilding at Cammell Laird remains a viable operation.

"We are also certain that the Government will provide Cammell Laird with the same level of financial and political support that we have seen extended to the farming community over recent weeks.

"Tony Blair has shown throughout the farming crisis that he is not a Prime Minister who is prepared to see the jobs and livelihoods of working people thrown on the scrapheap."