Swan Hunter has announced the creation of up to 200 jobs after receiving permission to dismantle ships.

The Environment Agency said it was granting the comany a modified waste management licence, effectively securing the immediate future of the Wallsend, North Tyneside, shipbuilder.

Swan Hunter is now in pole position to win potentially lucrative ship-breaking contracts - ahead of its Teesside rival Able UK, which has yet to win the same licence.

Chairman Jaap Kroese said: "This is fantastic news and it is going to create between 150 and 200 new jobs.

"With a bit of luck, we will be able to start dismantling work in a couple of months.

"It also means we will not have to make any people redundant, which we had feared."

Mr Kroese revealed that the company would not be going into partnership to carry out the work. Previous reports had suggested a multi-million pound tie-up with Dutch company NV Ecodock. He also said the main thrust would be towards winning contracts to dismantle UK ships, rather than vessels from overseas.

He said: "We are not going to go after foreign ships and we have already promised North Tyneside Council the work will be based around UK ships.

"We have done this kind of work before, dismantling offshore platforms and North Sea rigs and we will not be causing a hassle to anyone on the Tyne."

The 67-year-old previously said the yard's future could depend on securing the licence, with work on shipbuilding contracts due to end soon. Last year, the company missed out on being one of the prime contractors in a £4bn deal to build Royal Navy aircraft carriers.

For the shipbreaking, it plans to use a floating dry dock to tow ships into the Wallsend yard, which will then be sealed to prevent any potentially contaminated materials escaping.

Environment Agency manager Graham Donachie said: "Proper measures need to be put in place to prevent any environmental harm and Swan Hunter has provided us with the technical information to show us that this can be done."

Crucially, Swan Hunter already had planning permission from North Tyneside Council for such work at its Wallsend yard, which was necessary before any licence for shipbreaking could be granted.

Rival Able UK, in Hartlepool, has no such permission.