A NORTH-EAST shipyard battling for a slice of a £1bn Ministry of Defence contract has been sent back to the drawing board to make its pitch more competitive.

Shipping group Maersk is leading a consortium that includes Cammell Laird on the Tyne to chase the 20-year contract to build six roll-on roll-off ferries for the MoD.

Now it has asked Cammell and yards in Glasgow and Belfast to tighten up their parts of the bargain, a week after the MoD invited Maersk and three rival consorita to revise their bids by July 6.

Cammell's share of the work would create hundreds of jobs in the region's work-starved maritime industry. A statement from Maersk said the UK yards, in previous bidding, "were not able to offer sufficiently competitive bids," but said it wanted to give UK yards every chance to prove their competitiveness.

There has been speculation that a rival foreign consortium could undercut the British bids by 50 per cent, using cheap labour in Poland and eastern Germany.