A TROUBLED North-East shipyard has been thrown a lifeline.

Cammell Laird, which went into receivership last year, is rapidly running out of work at its yard in Hebburn, on Tyneside.

Yesterday, the Ministry of Defence awarded a contract to shipbuilder A&P for the repair of three Royal Fleet Auxiliary vessels.

Work on two of the ships will be sub-contracted to Cammell Laird's yards at Hebburn and Merseyside, while the other work will be undertaken at A&P's yard in Wallsend.

Initially, both A&P and Cammell Laird submitted bids for the work but Cammell Laird went into receivership during the tender phase.

A spokesman for receivers PricewaterhouseCoopers (PwC) said: "We are very pleased that further work is coming into the yard.

"It will prolong the employment of a substantial number of people here and the length of time during which we can seek a buyer for the yard as a going concern.

"However, it is just a 19-day contract so, in the overall scheme of things, it does not make a significant difference."

Work is due to start on the landing ship Sir Tristram, at Hebburn, next week.

The yard's managing director David Dobson said: "It is difficult to keep everybody fully motivated at a time like this, but the announcement about the Tristram is good news.

"We are trying to keep business as usual at the yard."

Earlier this month, 82 jobs were lost at Hebburn, five at Cammell Laird's yard on Teesside and six on Merseyside.

This was the latest in a series of cuts which have left just over 1,000 employees at the three yards.

PwC is continuing to bid for work, but if new contracts are not found, the yards will close before a buyer is found.

David Skentelbery, Cammell Laird's group manager, is putting together a management bid for the Hebburn yard.

Swan Hunter boss Jaap Kroese said last week he also planned to submit a bid for the site but the deal would not include its 400 workers.

Other potential bidders include A&P, Ugland, of Norway, and venture capitalists Alchemy Partners.

Cammell Laird ran into trouble last year when the Italian cruise line Costa Crociere cancelled a £50m contract