On behalf of 1,300 engineers and specialist staff at the yard, which maintains, upgrades and fuels the UK nuclear submarine fleet, Prospect branch secretary Del Northcott said:

"The news is welcome because it brings an end to a period of uncertainty about the future of the yard. We hope the new owners will enter into a productive relationship with Prospect and the other unions at DML. We will be seeking an early meeting with Babcock to discuss their long-term plans."

However, Prospect negotiator Jim Cooper warned Babcock the yard could be facing turbulent times. "Prospect is launching an indicative ballot on industrial action among members because of the non-payment of progression payments over the last three years. Resolving the dispute is at the top of our list, whoever owns the yard."

Babcock already owns Rosyth Royal Dockyard and maintains the submarine naval base at Faslane, both in Scotland. On May 10, Babcock announced that profits for 2005-06 were up 38 per cent to £57m.