DAVID Cameron has been challenged to cut through the red tape holding up a multi-million pound upgrade of Southampton’s container port.

Former Cabinet Minister John Denham, the MP for Southampton Itchen, told the Prime Minister the investment was being held up by “bureaucratic paralysis”.

The vital work, which would allow the city to accommodate the next generation of supersized container ships, has been delayed because of a legal challenge from a rival port operator.

In a letter to Mr Cameron, Mr Denham picked up the Government on its pledge to “unlock” private investment.

Ministers have repeatedly promised to support so-called “shovel ready” schemes that could boost local economies.

Mr Denham, who recently stepped down as Labour’s business spokesman, wrote: “I am writing to ask that you urgently cut through the red tape which is currently preventing a major £150m plus investment in the port of Southampton.”

It is essential the work takes place in the next 12 months, Mr Denham wrote, or Southampton will lose trade to other ports – potentially in mainland Europe.

The investment by ABP Southampton would safeguard 800 direct and 1,200 indirect jobs while creating 200 new positions, Mr Denham added.

He went on: “The investment is being held up by bureaucratic paralysis and indecision at the Marine Management Organisation (MMO) and by aggressive legal practice by a rival port operator.

“This is an issue where it is in the UK’s national interest for you to intervene, bring the parties together and do whatever is needed to resolve the issue.”

The Daily Echo revealed how environmental consent for the multi-million-pound upgrade of berths 201 and 202 had been withdrawn following a judicial review lodged by Hutchinson Ports, which owns Felixstowe Port.

ABP Southampton's application will now be re-assessed by the MMO after the port owner submitted a new environmental statement.