A SHIPYARD boss was last night caught up in a political row following Tory claims that his company had been handed a "secret" £84m lifeline.

The Northern Echo reported last month how the Ministry of Defence had agreed to pay the cash to Tyneside company Swan Hunter.

This week, the Conservatives demanded to know why the Government had not made a formal announcement about the deal to Parliament.

Gerald Howarth, the Conservative defence procurement spokesman, said the timing of the grant, onlymonths before an expected General Election, was "suspicious".

The £84m was agreed after Swans encountered problems delivering a £160m contract for two Royal Fleet Auxiliary on budget.

Without the money, the yard was facing closure, with the loss of 1,500 jobs.

The company blamed the difficulties on the MoD changing the order specifications - an allegation the Ministry denied.

Work on the Largs Bay will finish next month and about 100 jobs will be lost at the yard in Wallsend, North Tyneside. Its sister ship, the Lyme Bay, is due to be completed next year.

An MoD spokesman last night declined to comment on the Conservative's accusations, saying it was a political matter.

He restated the Ministry's position that paying the extra cash had been the best option.

He said: "The construction of the vehicles is virtually complete. Therefore, the retention of Swan Hunter as the lead yard offers the MoD and the taxpayer the best value-for- money solution for delivering this capability."

No one from Swan Hunter was available for comment last night.