A HAMPSHIRE ferry company's decision to place a £2.5 million order outside the South has come as another blow to a shipbuilding firm, threatened with closure.

While the Vosper Thornycroft shipyard at Southampton is desperate for work, and the future of 650 workers hang in the balance, the Gosport Ferry Company handed its order to Bristol.

Southampton dockyard workers have received the news with despair and said the lost order could prove to be another nail in the Woolston-based firm's coffin.

The ferry company said, while it would have preferred to have given the order to a South Coast yard, the Bristol builder's tender had been the most competitive.

Trade unionist Mike Budd, chairman of the Southampton branch of the Confederation of Shipbuilding and Engineering, said he was very disappointed at the news.

He said: "There seems nothing but bad news for Vosper at the moment. I'm sure we put in a competitive tender for the work, but somehow we lost out to a shipyard many miles away.

"It doesn't seem to make sense. The workers aren't involved in the bidding process, but we obviously can ensure projects are done in time and to the highest standard.

"This is more gloomy news for the workers and morale will suffer even more now because we're getting closer and closer, to mass redundancy and closure.''

VT has no significant projects in the pipeline and is still waiting to see if it is awarded orders for a fisheries protection ship and the Royal Navy's Type 45 frigate.

If VT is not awarded the work, 650 workers could be made redundant and the Southampton yard could close down.

A crucial VT board meeting on Thursday, March 22, will consider whether investment in the company's shipbuilding division will continue.

Charles Withinshaw, Gosport Ferry Company finance director, said his company had asked eight yards to bid for the work and was about to give it to an Isle of Wight company that went bust. He said: "It's a great shame we couldn't give the work to a local yard, which we'd have preferred, but the Bristol firm made the most commercial sense."

A VT spokesman confirmed the company entered into a competitive tendering process, but failed to win the ferry order.

It is estimated the two existing ferries have taken about 100 million people to work and leisure across the short stretch of water between Gosport and Portsmouth since 1966, making them one of the busiest ferry services in the country.

The new larger and wider ferries, capable of operating in the Solent for the first time, will be delivered in April in time for the busy tourist season.