A GOVERNMENT decision not to go ahead with a £100m order for repair and recovery armoured vehicles is putting hundreds of jobs at tank builder Vickers in doubt.

The Ministry of Defence (MoD) yesterday confirmed that the contract for Heavy Armoured Repair and Recovery Vehicles (HARRVs) had been delayed by up to two years.

The decision puts the livelihoods of more than 500 staff at the Vickers tank factory in Scotswood Road, Newcastle, in doubt. It follows the blow that a £1.2bn deal with the Greek government for Challenger 2 tanks could be put on ice in the run-up to the Athens Olympics.

A spokesman for Rolls Royce, which owns Vickers, confirmed that both orders faced delays.

He said: "The HARRVs deal is at least two years away now, and there has been suggestions that the Greek government is considering delaying all its defence contracts in the run-up to the Olympics, although we are confident that the tank contract will eventually go ahead."

The MoD is believed to be planning to cut around £1.2bn of Army spending over the next few years, and the HARRVs deal is one that could be delayed, despite the fact that it could be vital to the long-term future of the Vickers plant on Tyneside.

The HARRVs are due to replace equipment in artillery regiments, based on the Chieftain tank, which are now obsolete and difficult to maintain.

The new vehicles are to share the same chasis as the Challenger 2 tank.

Vickers was due to have started work on the orders earlier this year.