Work on the Royal Fleet Auxiliary vessel, the Lyme Bay, will be completed soon. If Swan Hunter, in Wallsend, North Tyneside, wins the contract, that will keep the yard occupied until bidding starts later this year for a Dutch contract to build eight ships.

Swans can market its shipbreaking facilities after the Environment Agency granted the yard its licence after a six-month wait.

Yesterday, owner Jaap Kroese said: "We are bidding for four ships to be broken for the Navy and, like everyone else, we have to make an offer and, if it is a good offer, then we will get the work.

"We can make a good offer - we wouldn't have applied for our licence if we couldn't. The licence has cost us a lot of money and we have had to put a lot of procedures in place.

"We are likely to work on these types of warships because commercial ships tend to get sold on and end up in places like Pakistan."

Swans will also be bidding for a contract to build eight ships for a Dutch company, but Mr Kroese said the work was unlikely to be awarded before the end of the year.

In the meantime, Swans remains for sale. Mr Kroese said there had been plenty of interest, although no offers had been made.

The troubled shipbuilder is still in talks with the Ministry of Defence over whether the Lyme will remain in the North-East or move elsewhere due to cost increases.