Who gains from Bay ruling?

The decision to throw out ABP's plans to build a huge new container port at Dibden Bay has been described as a "hammer blow" for Hampshire's economy.

But as gloom descended on the city this week, shipping giant P&O was anxiously waiting on the result of another public inquiry into its own huge project to build a deepwater container port at a disused oil refinery in Essex.

The massive Thames Gateway terminal would handle around 3.6 million containers a year if it is given the go-ahead.

The smart money is on the government giving the green light to Essex's contender for the title of Britain's primary deepwater port.

The two men charged with the final decision are Deputy Prime Minister, John Prescott and Transport Minister Tony McNulty.

They have the ultimate say over whether the strategic port needs of UK plc would best be served by Essex - or elsewhere.

Mr McNulty stunned Southampton on Tuesday when he agreed with planning inspector Michael Hurley that the planned port would cause unacceptable environmental damage to Dibden Bay.

Yet in Essex, the proposed Thames Gateway port would create none of the environmental problems raised so successfully by objectors in Hythe.

It would also slot in neatly with John Prescott's plans to create a huge new economic development zone stretching from Tower Bridge to the Essex marshes.

Last February, Mr Prescott launched the "sustainable communities plan", a blueprint which over the next 25 years will see a forest of cranes along the banks of the Thames building an estimated 120,000 new homes and creating around 300,000 jobs.

The "Thames Gateway" project, which involves the regeneration of the north and south banks of the Thames, first surfaced in the 1980s with the then Prime Minister Margaret Thatch-er's much-quoted intention to "do something about the inner cities".

The task passed to her bitter rival in the party, Michael Heseltine, who dreamed up the idea of a huge regeneration project starting in London's docklands and stretching down towards the Thames estuary.

When Labour won power in 1997 the party continued with the vision of expanding London eastwards along vast tracts of so-called "brownfield" land.

Key developments along the river include the creation of a new bridge across the Thames and huge new industrial parks.

Already, vast new housing projects have been given the go-ahead in Dartford and Gravesend. Dartford has also become the site of Europe's biggest shopping mall, Bluewater.

Further down the river in Thurrock, a vast closed oil refinery Shell Haven is one of three other proposed sites for deepwater ports in Britain.

Other contenders are Bathside near Harwich in Suffolk and the Landguard container terminal near Felixstowe.

Mary Spence, chief executive of the Thames Gateway South Essex Partnership, said: "I don't think that Dibden Bay being turned down is going to make any difference to the eventual decision about Shell Haven.

"The secretary of state will make his own decision on the basis of the evidence for each separate case.

"When the original proposals were made, we were very positive about the effects it would have on our regeneration area.

"We wanted to see the opportunity to create new jobs and inward investment in the area but we do want to be sure that the issues - particularly those relating to transport and infrastructure - are resolved in any decision that the secretary of state may make."

She added: "There is obviously concern about the impact on the environment. Our position remains we would welcome the opportunity for new investment and new jobs but we would want guarantees of the necessary investment in infrastructure."

A spokesman for the Office of Deputy Prime Minister refused to be drawn on what the eventual decision would be on the proposed Thames Gateway terminal.

Shipping giant P&O - which ironically also has offices in Southampton - is keeping tight-lipped about its hopes for a favourable decision on the new terminal.

Spokesman Victoria Moth said: "We will be waiting and watching."