BOSSES at ship repair specialist A&P Tyne said a contract it had won for maintenance work on a North Sea ferry would not remove the threat of job losses at the troubled shipyard.

The Tyneside yard will carry out work on DFDS Seaways' flagship vessel, the Queen of Scandinavia, at its dry dock this month.

But managers at the company, which announced plans to mothball its 130-year-old Wallsend shipyard at the end of last month, said the short-term contract was too small to safeguard jobs and that an announcement on redundancies was expected next week.

A&P director David Skentelbery said: "We are obviously delighted to win this work, but it is not going to change things as far as job losses are concerned.

"This is a routine contract and though it is welcome, what we really need are major long-term contracts to secure our future."

The fate of about 350 workers remains in the balance after A&P admitted redundancies were inevitable following the closure of the Wallsend site.

Staff from Wallsend have been moved to the company's Hebburn site, in South Tyneside, which is larger and better equipped.

But A&P said there was not enough work in the order books to keep the business afloat without job cuts.

However, Mr Skentelbery said A&P were in the running for four major contracts and expected to know if the company had been successful before the end of the year.

The company has also secured contracts to carry out routine maintenance work on two off-shore vessels at the end of the month.

He said: "This is a very competitive market, but we certainly have not given up hope."

Work on the DFDS Seaways' vessel will be carried out over two days, starting on Monday.

DFDS Seaways managing director John Crummie said: "We are delighted to award business to a North-East company.

"The dry dock at A&P Tyne offered the best location and the least disruption to our schedule and customers, which was very important."

The decision to mothball the Wallsend yard, expected to save the company £500,000, is the latest blow to hit industry on the Tyne, which has lost 700 jobs in the past 12 months.