TWO of the Tyne's offshore fabrication yards are being sold, The Northern Echo has learned.

The future of McNulty Offshore was thought to be secure following the resolution of a pay dispute with a major customer.

But the company has other debts and administrators KPMG last night confirmed they were investigating selling the South Tyneside yard as a going concern.

Yesterday, an Amec spokesman confirmed that its offshore yard at the Tyne was in the hands of its property services division - and refused to rule out a sale.

The Northern Echo has learned that the site will not be reopened for fabrication work, in another blow for shipbuilding and offshore work in the region.

The group, which mothballed the yard in June last year when work ran out, with the loss of 500 jobs, has a delegation of engineers on its Wallsend site, but they are not directly connected with the offshore yard.

Last night, a spokesman for Amec, which has operations in Darlington, said: "There are two parts to the Wallsend site - the fabrication part, which builds the rigs, and the engineering department, which is still a vital part of what we do at Amec."

He said that Amec's property division had taken control of the fabrication part of the site and was looking at various options, including a possible sale.

He said: "All options do remain open at the moment."

He said the 200 engineers who work at Wallsend were crucial to Amec.

McNulty, unlike Amec, is believed to have a healthy order book running into next year, and last year had a £35m turnover.

Billy Coates, senior organiser with the GMB union, which represents the yard's 340 workers, said: "As we understand it, the yard will go out to offers, to try and clear some of the debt.

"We are very keen to see it picked up as a going concern and I am cautiously optimistic that it will happen."

Directors at McNulty called in the receivers at the beginning of this month, following a multi-million pound wrangle with French group Technip. McNulty was contracted to build part of a Nigerian gas module for Technip.

The company was legally bound to complete the order, even though it had not received payment for it.

Only administrators are able to stop an order going out until payment has been made.

The contract will be completed by the end of the month.

Mr Coates said: "If there is no work in hand, administrators will shed labour."

A spokeswoman for KPMG confirmed the yard was up for sale, but declined to comment further