A DEAL uniting Hampshire and the UK's two remaining naval shipbuilders will proceed thanks to the Government's £4 billion aircraft carrier deal.

Called BVT, the new company, which is due to be established by July 1, will instantly be one of the biggest in Hampshire with a turnover of about £1 billion and 7,000 staff, including 3,000 in its Portsmouth headquarters.

Hedge End-based VT, formerly Vosper Thornycroft, is to merge its shipbuilding and naval support arms with Farnborough-based BAE Systems warship division.

VT, which still employs hundreds of Southampton workers from the days when it was based in Woolston, will have 45 per cent of the new company, while BAE will have the remaining 55 per cent.

Work on the ships, to be called The Queen Elizabeth and The Prince of Wales, will sustain 10,000 UK jobs at its peak, including 1,200 at VT's Portsmouth shipworks, which will build the forward mid-ship sections of the vast ships.

The 280-metre, 65,000-tonne carriers will be capable of carrying up to 40 aircraft and are due to go into service in 2014 and 2016.

Defence Secretary Des Browne told MPs in a written statement that the MoD has now completed the financial, commercial and management arrangements necessary for the project to go ahead.

Mr Browne said: "The two aircraft carriers will provide our frontline forces with the modern, world-class capabilities they will need over the coming decades. They will support peace-keeping and conflict prevention as well as our strategic operational priorities.

"This is an important day for the project and I am delighted that we are moving closer to signing the contracts for the manufacture of the carriers."

BAE and VT already work together on Ministry of Defence contracts, with VT building the bow and mast sections for the Royal Navy's Type 45 Destroyer programme at Portsmouth and the rest of the work and assembly being done by BAE at Glasgow.

About 1,500 jobs from VT Group will transfer to the new venture. It will also sweep up an existing BAE-VT joint venture, Fleet Solutions, which employs 1,500 people. The remaining workers will come from BAE.

It is thought several dozen "white collar" administration jobs will be lost as a result of the combination.

BVT's chief executive-designate is the former managing director of helicopter firm AgustaWestland, Alan Johnston, while the chairman is maritime industry veteran Sir John Parker.

The joint venture framework was agreed last year after the Government signalled it wanted Britain's "fragmented" maritime sector to be consolidated into a single operator. It is hoped the firm will go on to secure work from around the world.

BAE chief executive Mike Turner said the new venture would "play a major part in the long term sustainability" of the UK naval sector. Other firms playing a part in the carrier contract include defence contractor Babcock and technology company Thales UK.