GATESHEAD firm De La Rue has said it will not appeal against the Government's controversial decision to choose a Franco-Dutch company to make the new blue UK passports after Brexit.

De La Rue, the current passport provider, said that it had "considered all the options", but would not challenge the move, which will see the £490 million contract handed to Gemalto, which has its headquarters in Amsterdam and is listed on the French and Dutch stock exchanges.

De La Rue also confirmed that its full-year earnings would be hit by a write-off of about £4 million related to the bid costs for the passport tender.

It said underlying operating profits were now forecast in the "low to mid £60s million range", against previous expectations for between £71 million to £73 million.

The firm added: "De La Rue will continue to fulfil its existing contract and assist with transition to the new supplier and is therefore expecting no impact on the group's performance in the next 18 months."

The Government has come under heavy fire for its decision to choose a European firm for the contract, but has claimed it will save £120 million during the lifetime of the 11-and-a-half-year contract.

Unite national officer Louisa Bull said: “This news will come as a bitter blow to De La Rue workers who now face an uncertain future. Workers will feel let down that the company is not prepared to fight the Government’s decision to ship the production of the new blue passport overseas. 

“For the last decade De La Rue has produced the UK’s passports securely without any problems and provided a source of decent well paid jobs in the North-East.

“Theresa May and her Government is now putting all that at risk with little thought of the consequences or the shockwaves that it will send through the community and local economy.

“It would not happen in France where they produce their own passports on the grounds of national security and it should not happen here in UK.

“Unite will be working closely with De La Rue to seek assurances on jobs as well as supporting workers through these uncertain times.

“It need not be like this though. Unite and our members are mobilised and prepared to fight the government’s decision which represents a dark day for UK manufacturing.

“Theresa May needs to wake up to the anger her government’s short sighted job destroying decision has generated and intervene to back UK passport workers by ensuring Britain’s blue passports are made in the UK.”