By David Fenton BBC Southampton's business and technology correspondent

Part of a series of special reports on the state of British manufacturing

Vosper Thornycroft has been building warships for the navy for nearly 100 years.

The first was launched from its Woolston works on the River Itchen at Southampton in 1907 - but next spring it will launch its last ship from the same yard.

Vosper Thornycroft is leaving its hangars and its 50-acre site and moving to a Portsmouth dockyard, some 15 miles down the coast.

It may not seem like a major move - but it is.

Huge contract

For a start it leaves the maritime city of Southampton without a major shipbuilder, depriving the area of one of its few heavy manufacturing plants.

It also leaves the community of Woolston - heavily dependent on the works - in a precarious position.

Vosper Thornycroft was a source of symbolic pride

Many small businesses have already begun to close down but, ironically, Vospers is moving because of its own success.

The company has just won a huge new contract to build part of six new destroyers for the navy.

The work, which will be carried out in Portsmouth, will guarantee jobs for 1,200 people for at least the next decade, and possibly the next 20 years.

But the truth is that shipbuilding has been in decline for much longer than that, and Vospers has only just finished a redundancy programme.

'Training support'

Vospers spokesman Phil Rood said the difficulty is twofold: "Many countries are now building their own warships and just coming to us for the design and technical expertise.

"The Greek navy is a good example. We're designing their next generation of fast-attack craft, but they're the ones building the ships.

"Also there are a great many more second-hand ships on the market these days, principally from the former Eastern Bloc countries."

Ten years ago, Vospers saw the writing on the wall and decided to diversify. The company moved into training and fleet support, basically offering repairs and servicing to warships.

It acquired a careers advice firm and moved into the aerospace industry so that now 80% of its workforce are involved in non-shipbuilding activities.

Last year, for the first time ever, these "ancillary" activities provided more than half the firm's turnover and profits.

The odd thing is that Vospers is still seen by many people in Southampton as principally a shipbuilder.

Local heritage

In fact, most people would not even be aware of its other activities, but that is not entirely surprising.

I used to live across the water from Vospers and every evening I could see their hangars, lit up and dominating the skyline for miles around.

It was a firm which gave a centre of gravity to Woolston and a symbolic pride to city.

Everyone around here knew someone who had worked there and, on my fairly frequent visits, I have often spoken to men whose fathers and grandfathers before them did the same jobs that they are doing now.

That is one of the reasons why the workforce seems decidedly ambivalent in its attitude to the move to Portsmouth.

Wounded pride

The workers are pleased to have the guaranteed work, but they also know that the jobs might not be there for their children in the future.

There is also, it must be said, an element of wounded pride.

Portsmouth and Southampton are great maritime rivals and whatever the powers that be say, it is clear that Portsmouth has gained the upper hand at Southampton's expense.

The big question now is what happens to Woolston when Vospers moves.

The site will close down and eventually it will be sold off, probably for housing, shops and small light industrial units.

The sight of those great steel-grey warships, moored imperiously on the banks of the Itchen, will in time become just a distant memory.