BRITISH ports which, like Southampton's, fall into the hands of foreign companies risk being starved of cash or flogged to developers, MPs have warned.

A report by the Commons Transport Select Committee published today says foreign ownership may create "instability" in the industry.

It follows the takeover of Associated British Ports (ABP), which runs Southampton port, by Admiral Acquisitions, a consortium led by American bank Goldman Sachs.

The consortium, which took control last August, also includes Borealis Infrastructure Management, which is linked to Canadian pension fund OMERS, and GIC Special Investments, a company that is tied to the Singapore government.

ABP, in a statement issued at the time of the takeover, promised "business as usual" under its new ownership.

The select committee's findings contrast with the views of Southampton MP Alan Whitehead, who was relaxed about the prospect of the city's port being snapped up by foreigners last year.

Dr Whitehead, Labour MP for Southampton Test, said at the time: "If the port was not owned by British companies that would not necessarily be bad news for Southampton."

John Denham, Labour MP for Southampton Itchen, said yesterday that planning restrictions would make it difficult for a foreign company to sell off a port for development.

He added: "The risk is if an international company owns a number of ports in competition with each other and favours investment in one port over another."

The transport committee, in its report, said: "We are concerned that the ownership of UK ports by foreign companies, particularly those with no prior experience of owning and managing ports, may create instability within the industry."

Ports companies with foreign interests may decide on balance that investment and development is best prioritised outside the UK.

Similarly, investment companies may see more profit in selling off ports for land.