PLANS for a huge new dock on Southampton Water have been dealt a last-minute blow by the port's biggest container terminal shareholder.

Southampton Docks operator Associated British Ports wants to build a £750m container terminal at Dibden Bay.

It argued at a public inquiry, which ended in December, that the terminal was vital to the city's economic future.

Shortly after that inquiry another one began into an even bigger scheme on a former Shell oil refinery site on the Thames Estuary and it is due to end on Friday.

The Thames scheme, known as London Gateway, is being promoted by P&O, which is the 51 per cent shareholder on Southampton Container Terminal -and Shell UK.

So far ABP, which has a 49 per cent stake in Southampton terminal, has insisted that the main justification for Dibden Bay is that it is "necessary to secure the future of the Port of Southampton itself" and is not an alternative.

But if Transport Minister Alistair Darling decides the issue comes down to national interest and he has to choose between Dibden or Gateway, P&O has sent in a comparison on the two developments.

On the environmental front, it says the bay would "have a direct impact on up to 115 hectares of designated Special Protection Area" and London Gateway would mean no loss of SPA.

Dibden Bay, it says, is also a designated Site of Special Scientific Interest. In terms of ability to meet the national container demand, Gateway could handle 3.5 million 20ft containers compared with Dibden's 2.1 million. Gateway, it says, could meet UK need beyond 2020, whereas the bay could only meet demand until 2016.

The report handed to Gateway inquiry inspector David Ward says the Gateway could meet 78 per cent of predicted UK need, compared with 47 per cent at Dibden.

But ABP said: "There is no basis for arguing that London Gateway Port and Dibden Terminal are alternative projects seeking to meet a similar or the same identified need.

"P&O appear not to have understood the case advanced in favour of Dibden Terminal, which is centred on Southampton, its need to expand, and a number of factors specifically related to the port and its customers, all in conformity with the Secretary of State's policies."

ABP has also written to the inspector saying: "P&O have once again made the fundamental error of comparing the port applications currently before the Secretary of State on the basis that they are alternative schemes to satisfy the national need."

The P&O move has been welcomed by Residents Against Dibden Bay Port chairman Paul Vickers, who said: "Moving away from the national issue is a change of tactic that ABP put into the inquiry.

"What they are trying to ignore is that Dibden Bay is a site designated under European Union regulations, which would mean there had to be an overriding national need."