WORKERS and management at a North-East shipyard have been left devastated after a £1bn Ministry of Defence (MoD) shipping order sailed overseas.

The contract for six roll on/roll off (roro) ferries is heading to a German/Italian consortium ahead of South Tyneside's Cammell Laird yard.

Bosses at the Hebburn yard had been fighting for the deal for months, and a lobby of the Government is now underway in a bid to salvage the contract that could create 1,500 jobs.

The official announcement is expected to be made after the Labour conference later this month. It is thought the blow may be softened by a £120m order for the Swan Hunter yard.

The EU entered into the contract row over the £1bn contract in July asking why the MoD allowed the consortia bidding for the ferries to submit a second round of tenders.

The bidding process for the 20-year contract to build and operate the ferries was restarted in June after speculation a German-led tender had undercut a British consortium by £500m.

A decision that the ferries order could not be limited to Britain on the grounds of national security meant the best value for money bid had to be accepted.

Kevin Curran, Northern secretary of the GMB union, said: "We will continue to lobby the Government over this issue. It would be disastrous to see this contract go abroad. The Government will be using taxpayers' money to fund this contract and that should stay in the UK and spent by our workers in our economy."

Shipping group Maersk had committed itself to safeguarding jobs at Cammell Laird if it landed the order.

Other bidders, including Andrew Weir Shipping and Novomar, are thought to be looking to move the work abroad