AS the Ark Royal slid gracefully down the slipway and into the River Tyne 23 years ago no one could have realised how far the North-East shipbuilding industry would have to fall before another naval leviathan would be built there again.

HMS Ark Royal - the fifth ship to bear the famous name - was launched by the Queen Mother on June 20, 1981. The ship was the pride of the Tyne.

Ark Royal was the last of three small carriers built as a result of a classic political fudge.

The Navy wanted a full-sized carrier to replace the Ark's predecessor (made famous in the BBC series Sailor) and HMS Eagle).

Plans for these 45,000 tonne vessels were well advanced when they were cancelled in 1966. Ironically the decision not to press ahead was taken by Dennis Healey when he was Defence Minister in Harold Wilson's first Labour Government.

Healey was swayed by the RAF's insistence that it could provide air cover for any future naval operations.

The Admiralty wasn't so sure so it set about drawing up a carrier by stealth. The ships that would become HMS Invincible, Illustrious and Ark Royal were originally designated heavy cruisers.

The Navy got its aircraft carriers but for today's overseas operations, they are too small and can't carry enough aircraft.

So when the Government came to order replacements it was determined not to make the same mistake.

The two new carriers may be medium-sized by comparison to the American flat-tops but they dwarf the Ark Royal.

Costing almost £3bn the order - one of the largest ever placed by the UK Government - was crucial to the survival of ship-building in the North-East.

Since the Ark was launched almost a quarter of a century ago, even famous names such as Swan Hunter have felt the cold wind of recession.

Commercial shipping contracts have gone abroad where subsidised yards in the Far East can build vessels at a fraction of the cost.

So it was not a surprise that the battle for the carriers was so hard fought. On one side, we had British contractor BAE Systems (formerly British Aerospace) on the other, French giant Thales.

In the event, both bidders have emerged happy. Although BAE will be the lead contractor, Thales is to play a big role in the carriers' creation.

The political need to spread the work as far as possible means the carriers will be built in parts at four yards, including Swan Hunter.

This modular construction ensures employment at more shipyards but it remains to be seen if the project will run smoothly. Critics claim the potential for errors by building such monsters on different sites is far too large. After all, Mercedes doesn't build the bodywork for its cars at four different factories and weld them together.

All of which doesn't detract from the good news for North-East ship building.

Swan Hunter's success will put the yard in a prime position to win further contracts for frigates and destroyers likely to be needed as part of the carrier battle group. Aircraft carriers are particularly vulnerable to attack and need protection from a flotilla of smaller warships.

Announcing the contract yesterday Defence Secretary Geoff Hoon said the ships will be entirely built in the UK and will be a "massive technologically challenging programme".

Derek Simpson, joint general secretary of Amicus said: "Thousands of jobs in shipbuilding will be secured and tens of thousands more will now be safe in the supplier industries.

"Everything from communications technology to textiles will benefit from the historic contract."

Now the North-East has the chance to prove that once again Britannia can rule the waves.