INDUSTRY is gearing up to move out of Southampton docks after the plug was pulled on plans for the £600m container port.

It is understood that three "major players" are inclined to end their economic love affair with the port.

If that is the case, it will be a serious blow to Southampton's international standing as the second-largest container port in the UK.

A precedent has already been set, with motor giant Hyundai Group unable to get a foothold locally because of limited space.

According to an independent report, thousands of families in the city rely on the container trade, and some of those jobs will now be on the line.

The port accounts for one in ten of all workers in Southampton and five per cent of all jobs in the city's travel-to-work area.

Jobs include stevedoring, crane and forklift truck operating, administration, truck driving, checking and warehousing.

ABP said at the planning inquiry: "The economic consequences of a failure of the port to maintain its competitiveness would be enormous."

Virtually every local business and organisation with links to the port rang alarm bells over yesterday's bombshell decision, saying Southampton will no longer be able to meet the growing demands of the world's shipping industry.

One Hampshire freight firm, employing 130 people, warned that the rot is starting to set in as clients look elsewhere.

Phillip Baughn, branch manager of Hedge End based Wilson Logistics, admitted: "Customers are asking us not to bring their goods into Southampton, but into Felixstowe.

"A lot of lines will look to get out of Southampton and the UK and go to the international ports like Rotterdam and Antwerp.

"It is going to put the port of Southampton even deeper into the dark ages.

"It's absolutely short-sighted by the green welly brigade - they are holding us back."

The Freight Transport Association, which has key members in Hampshire, spelt out the dire implications for local lorry drivers following the "disappointing" decision.

It also said freight traffic will go to rivals Rotterdam and Le Havre.

Geoff Dossetter, FTA external affairs director, said: "The UK is the fourth largest economy in the world and can ill afford to limit its ports capacity."

There was a stunned silence when the news of the container port rejection was broken to 15 members of the board of directors at the Southampton and Fareham Chamber of Commerce, which represents 2,000 businesses.

Spokesman Catherine Wright said: "I don't mind saying there was a stunned silence - people looked shocked at the decision and the seriousness of the impact upon the city."

She added: "We are hearing accounts already of how this decision is having an immediate impact on our city economy, and clearly there will be longer-term consequences as we get to grips with what this decision is really going to mean for us all.

"Southampton has been a key part of the international container trade for a long time.

"This decision has put a serious dent in that reputation.

"Our port is a mixed business. Each part relies on the strength of the other.

"We cannot assume that the port of Southampton can carry on at the level of success we have become used to now.

"Southampton needs to have a long, hard think about who we are and where our economic strength can lie in the future.

"This can be an opportunity for us. But we need to regroup quickly and come together to decide which paths are open to us and how we can best exploit them."

David Ramsden, pictured left, regional chairman of the Federation of Small Businesses, said: "The FSB is bitterly disappointed with the decision to reject the proposal for the development of Dibden Bay as a container terminal.

"This will inevitably lead to Europe's largest container port being located outside the UK, a loss not only to the local economy but to the UK as a whole.

"The FSB believes that the decision to reject the proposal is detrimental to all businesses, but particularly small businesses, and will prevent growth in the small business sector.

"The development would have led to substantial improvements to the transport infrastructure, and the FSB fears that these will now be abandoned.

"While we appreciate the need to protect wildlife and the environment, the FSB is shocked that major economic development has taken second place."

Bob Terris, pictured right, managing director of Southampton based Meachers Group Holdings, which employs 250 people, did not pull any punches, saying: "It's a disaster."

An estimated 70 per cent of Meachers' work, ranging from transport, warehousing and freight forwarding, is linked in some way to the port.

Mr Terris warned that Southampton could end up being downgraded to a feeder port due to the lack of facilities, with "significant changes" being felt in the next three to four years.

Michael Green, partner-in-charge at Southampton based international property consultants King Sturge, said: "I do not think it is a particularly courageous decision, and it's not good for the city of Southampton."

David Tipple, a local partner at professional services company Grant Thornton, which has offices in Southampton and Segensworth, summed up: "It's bad news for jobs, it's bad news for the country, and it's bad news for the city."