FERGUSON'S shipyard has won a share of a giant £1.25 billion Royal Navy frigate contract.

The company is part of a consortium led by engineering giant Babcock that has been named preferred bidder for the lucrative Ministry of Defence work.

The contract is for five new Type 31e frigates for the Royal Navy, capped at a maximum of £250 million per ship.

Each vessel will be assembled at the Babcock dockyard in Rosyth but the manufacturing work will be spread out across the UK to sites, including Ferguson Marine.

It is the first big boost for the Port Glasgow yard since it entered administration four weeks ago.

The Scottish Government assumed control of the Newark facility in a deal with administrators to save 300-plus jobs and seek a buyer for the business otherwise it will be nationalised.

Concerns had been raised about Ferguson's role in the MoD contract because of the current situation but finance and economy secretary, Derek Mackay, last week quelled those fears.

Following the announcement of the preferred bidder yesterday, Mr Mackay said: "I have spoken with Babcock to assure them they have the full support of the Scottish Government.

"Once the final details of the contract are announced, we look forward to discussions on the role that Ferguson Marine could play alongside other suppliers in Scotland."

Detailed design work on the vessels is due to begin by the end of this year with manufacturing beginning in 2021 and the first frigate expected in the water by 2023.

The UK Government has committed to buying five of the warships but it is hoped orders will be placed by foreign navies, with the 'e' in Type 31e standing for 'export'.

Babcock's 'Arrowhead 140' design beat competition from a Cammell Laird-BAE Systems consortium and another led by Atlas Elektronik UK, of which Ferguson's was also part of.

The government says the work will support 2,500 jobs across the UK.

Archie Bethel, chief executive of Babcock, said: "Arrowhead 140 will offer the Royal Navy a new class of ship with a proven ability to deliver a range of peacekeeping, humanitarian and war-fighting capabilities whilst offering communities and supply chains throughout the UK a wide range of economic and employment opportunities."

The preferred bidder was announced by prime minister Boris Johnson at a shipping conference in London.

Mr Johnson said: "This is an industry with a deep and visceral connection to so many parts of the UK and to the union itself. "My government will do all it can to develop this aspect of our heritage and the men and women who make up its workforce - from apprentices embarking on a long career, to those families who have worked in shipyards for generations."

The contract is expected to be formally awarded later in the year.