Rosyth slashes 70m pounds off bid for Trident contract: Rifkind says eleventh-hour move will not prevent early Cabinet decision

ROSYTH dockyard in Scotland yesterday made a dramatic attempt to win the pounds 5bn contract to refit Trident submarines by submitting a new bid that sliced pounds 70m off its previous offer.

But the eleventh-hour move by Babcock Thorn, Rosyth's managers, looked set to fail, as it emerged last night that Malcolm Rifkind, Secretary of State for Defence, was not prepared to delay a decision in light of the new bid. The contract is expected to be awarded tomorrow.

Mr Rifkind is understood to believe that it is unreasonable, after months of discussions, to produce new proposals that could have been presented at the outset. A senior Whitehall official said last night: 'We cannot allow a sudden proposal to throw everything back into the melting pot.'

Rosyth's move was denounced by its competitor, Devonport in Plymouth, as a desperate attempt to delay the inevitable. Although Mr Rifkind has pledged that both yards will stay open, Scottish MPs believe the Fife yard will have no long-term future without the lucrative contract to refit the Royal Navy's nuclear submarine fleet.

The protracted delay in resolving the issue has raised the damaging spectre of a government paralysed by its small Commons majority.

West Country Tory MPs are still confident that Devonport will eventually win the contract and secure the thousands of jobs at risk. But they have threatened to imperil the Government's slim 18-seat majority by defying whips on some votes if it ultimately goes to Rosyth. They warn that up to 20 Conservative seats could be at risk in the region, where they face a heavy threat from the Liberal Democrats.

On the other hand, Scottish Tories have warned of the virtual annihilation of the Conservatives in Scotland if Devonport wins.

Gordon Brown, the shadow Chancellor and the Fife yard's constituency MP, said: 'When I met the Navy minister, Jonathan Aitken, last month he confirmed to me that Devonport had been allowed to cut its bid during the review period. Ministers must now treat seriously a bid that reduces costs by pounds 70m.'

Rosyth's existing bid was thought to be pounds 130m against Devonport's offer of pounds 120m. Babcock Thorn said the 'radical proposal' to slash pounds 70m was based on using its existing emergency dock facility, which was intended to be used for emergency work on HMS Vanguard, the first of the Trident fleet.

Rosyth now says it can develop the emergency dock for pounds 60m. Under the new proposals, the nuclear submarines would have all refuelling work, including the removal and replacement of radioactive material, done in the upgraded facility. The vessels would be moved for other non-nuclear refit work into one of Rosyth's other five docks.

Rosyth's design and safety argument is that because no fuel is on board the nuclear submarines during the greater part of the refit, the extra expense of upgrading other docks to modern standards is no longer necessary.