IT IS a lucrative deal to build new fuel ships for the Royal Navy that will support thousands of jobs.

The 37,000-tonne “military afloat reach and sustainability tankers” will allow the Royal Navy warships the ability to refuel at sea.

But the £425m order for four of these ships has not been placed with Britain’s remaining shipyards.

Instead the Government awarded the contract to shipbuilder Daewoo which operates massive shipyards across South Korea.

Yet the order is just a drop in the ocean for the Asian country, which before the 1950s had no maritime pedigree to speak of.

Latest statistics from industry analysts Clarkson Shipping Intelligence Network show South Korea has 774 commercial vessels on order.

The only commercial ship in Britain being built is a small Scottish island ferry.

Our once mighty – and world beating – shipbuilding industry has been sinking since the end of the Second World War after it was exposed to competition in low-cost Asia.

First Japan jumped aboard, using the building of ships to shore up its economy that had been shattered during the war.

South Korea followed and by the 1970s the two nations were building the lion’s share of the world’s merchant fleet.

Now it is the unstoppable economic machine that is China that builds the most.

They have more than 2,000 ships on their books, with many firms destined to ship their products to Europe, America and Australia, while others importing vast amounts of raw materials from Africa and South America.

But while the industry has largely decamped to Asia, our European neighbours still build ships.

Take Norway. Some 53 ships are in the pipeline there, with the majority of them specialist ships to service the North Sea oil industry, which, of course, it shares with Britain.

Meanwhile the giant luxury cruise ships gracing Southampton docks are all mostly built in European shipyards. Currently 28 are on order.

Cunard had wanted to build the Queen Mary 2 in a British shipyard. The only one able to was Belfast’s Harland and Wolff, which built the iconic ships such as Titanic and Canberra.

But the Government failed to provide the guarantees necessary to build it and so the order went instead to French shipbuilders Chantiers De L’Atlantique in Saint-Nazaire.

Along with France, Germany’s workforce has benefited from building passenger vessels.

And unlike Britain these countries and others have also successfully exported warships.

Dr Duncan Redford, senior research fellow at the National Museum of the Royal Navy, said: “Fundamentally warship building in the UK for many years has solely been about supporting the Royal Navy, but others have not just supported their own indigenous requirements but made a virtue of exporting its shipbuilding designs.”

Spain is in the stages of completing two 27,000 tonne Canberra Class Amphibious Assault Ship (LHD) for the Australians, once big customers of British shipyards.

The announced closure of BAE’s shipbuilding operations in Portsmouth ended more than 500 years of shipbuilding in Hampshire which included the construction of Admiral Lord Nelson’s warships at Buckler’s Hard in the New Forest and 100 years of shipbuilding in Woolston, Southampton, by the company latterly known as Vosper Thornycroft.

It also signified another chapter in the decline in British sea power. A century ago Britannia really did rule the waves with two-thirds of the world’s ships flying the red duster.

University of Southampton historian John McAleer, a former curator at the National Maritime Museum in Greenwich, said: “I think that is what is niggling people as well as the obvious worries about jobs and industry.

“Britain’s maritime heritage is Britain’s history. The two are absolutely interlinked.”

So what went wrong for this once mighty industry?

The reality is that British shipbuilding has been in trouble since after the Second World War.

Some say it was industrial strife between management and unions.

Others blame lack of investment in new equipment and cost effective manufacturing techniques.

But the general consensus is that our ships were too expensive and that huge new shipyards in the emerging economies of Japan and South Korea, were simply producing cheaper ships by the 1970s.

But leading shipbuilding expert Dr Martin Stopford, who worked in the industry for decades, said the crunch for commercial British shipbuilding came in the 1980s with a double whammy of world recession and a strong pound making our ships too expensive.

He said: “The price we could sell a bulk carrier for would just buy the materials to build it.”

While strict European Union subsidy rules for shipbuilding were observed in the UK, he says other countries were less transparent than us – and a little cleverer at funnelling subsidies into their yards.

Meanwhile he said countries such as Germany, France and Italy had made a strategic decision to build cruise ships which is something their Asian counterparts were unable to do.

As the cruise ship industry boomed they could supply the vessels, while our yards had missed the boat.

After shipbuilding in Portsmouth stops next year, just two BAE systems shipyards in Glasgow and one submarine builder in Barrow in Furness will be holding the flame of a once mighty industry.

They will continue to build cutting-edge warships into the next decade but represent a tiny fraction of what once was.

The irony for our shipbuilding is that while our industry has fallen behind, we are entering a golden age of shipping with tens of thousands of vast container ships criss-crossing the globe carrying goods between continents.