TRADE unionists today welcomed a possible lifeline contract to build a huge floating hotel that could help save hundreds of jobs at the troubled Vosper Thornycroft shipyard in Southampton.

The potential job-saving work is still at the negotiation stage but was seized on as a welcome new year's boost that could save the company from making up to 650 redundancies.

Despair and gloom descended on the shipyard days before Christmas when VT said the jobs would have to go because the world-famous Woolston yard had no significant contracts.

Now workers are hoping the new order is in the pipeline for a 200-berth floating hotel. If VT does clinch the project, work could be created for most of the workforce for the next six months.

Bob Stokes, secretary of the Southampton branch of the Confederation of Shipbuilding and Engineering Unions, said: "Frankly, any work would be very welcome to our members. Vosper is desperately short of contracts and we don't know where the next one is coming from."

The non-powered ship is destined for Canary Wharf, in London's Docklands, and caters for the business end of the market, though non-guests would be tempted by two restaurants on board.

The yard is desperate for the MoD to order the new Type 45 destroyer from it because the work would save the yard from possible closure. But the MoD has delayed making any decision where the destroyer work will go.

Trade unionists and MPs joined forces to try to avoid the job losses by seeking to persuade the government and the MoD of the importance of the Royal Navy's newest ship staying with VT.

Meanwhile, any work for the skilled tradesmen would be welcomed with open arms at VT. Even if the warship is awarded to VT it would not begin for another 18 months. In the interim devastated workers and their families are pinning their hopes on a fisheries protection vessel to keep them in work.

A spokesman for VT said: "The floating hotel is the subject of negotiations with the developer and planning application has been submitted to Tower Hamlets council, but the is no contract with Vospers.

"It is too early to say whether Vospers has the work or where it would even be built.''

Mr Stokes said: "If this is to be a contract it would be the best New Year's present ever for the workers. It could be the saviour of virtually all the jobs and help safeguard the yard until the next contract comes in.''

The size of the floating hotel work depends on whether the yard would both build and fit out the vessel.

The delay to the destroyer contract comes after BAE Systems Marine made a surprise bid to be the sole builder of the warships.

VT was relying on the warship order to invest in a move from Southampton to Portsmouth, yet another blow to local workers.