YARDS belonging to troubled shipbuilder Cammell Laird are to be mothballed when orders run out next week, causing hundreds of job losses and bringing more gloom to the beleaguered manufacturing industry.

The news, announced by receivers called in three months ago to sell the firm's three yards, came as a Confederation of British Industry survey showed manufacturing firms were facing deteriorating conditions and thebiggest fall in export optimism for two-and-a-half years.

Work at Cammell's yards at Tyneside, and Birkenhead on Merseyside, will end next Tuesday, and receivers said it was unlikely the yards could be sold as going concerns.

"In these circumstances, the receivers will have no option but to mothball the yards, retaining a skeleton staff to maintain them until they are sold," said receivers PricewaterhouseCoopers (PwC).

The receivers would not say how many workers would be laid off, but hundreds face redundancy over the next week.

About 160 workers are still employed at Tyneside and 360 at Birkenhead, while 14 remain at the Teesside yard, which was mothballed earlier this year.

PwC said it had tried to achieve a going concern sale, adding: "In this process, the receivers have received tremendous support from the workforce in what have been very difficult circumstances, and from the Ministry of Defence which has continued to award work to the group.

"Although the receivers have discussed a going concern sale with many interested parties, it now appears clear that all have been deterred by the possible liabilities they might incur."

A spokesman for the GMB union said: "This is disastrous news. The Government cannot stand by and watch jobs and livelihoods sink."

Sir Ken Jackson, general secretary of the Amalgamated Engineering and Electrical Union, said: "This is a landmark in the history of British shipbuilding."

Cammell went into receivership in April with debts of £150m, following the loss of a £50m contract to equip an Italian cruise ship with a new middle section.

The Birkenhead yard had completed work to build the section for the Costa Classica. But the ship was dramatically ordered home when it was halfway between Italy and Merseyside, and the deal collapsed.

Cammell then pinned its hopes on a £350m order to build two cruise ships for Luxus, which also ended in disappointment.