The men worked at the Swan Hunter yard on Tyneside

Talks are continuing in an effort to settle a three-week pay dispute involving contract workers at the Swan Hunter yard on the Tyne.

At one point the strike spread to the main workforce, which saw about 1,000 men stop work.

Now the chief executive of Swan Hunter, Japp Kroese, who is credited with bringing shipbuilding back to the Tyne and Tees, says future Ministry of Defence (MoD) contract are under threat.

He described the industrial action as "a disaster".

He said: "Everything we have worked for over the last five years has just gone.

"In the middle of a contract these guys walk out, it takes three weeks, then our lads walk out and the next thing we know is that everything we have built up is just coming down.

Maritime agreement

"I look like a fool going to the MoD asking for more work on aircraft carriers and work for the next 10 years, when we don't have a workforce.

"There is no strike in the world that ever created a job."

Mr Kroese also said the action could jeopardise a �50m investment plan for the Swan Hunter yard on Teesside.

He said: "The banks know that is going on. We have a �50m investment plan in Teesside. The banks are going to say 'wait a minute, are you going to get so much work from the MoD. Are you sure you're not going to have this unrest again'"?

Mr Kroese also said he would be pulling out of a maritime agreement with the Amicus union, which has normalised pay and conditions for thousands of shipyard workers for several years.

Mr Kroese said: "I am going to pull out of the agreement because we are going to have our own agreement with the GMB, because they are a constructive union."

Officials from the Amicus union described the latest talks over the dispute, held on Tuesday, as "constructive".

About 100 men, who worked for contractors C and D Industrial Services, said their pay was less than that of workers in similar positions at the Swan Hunter yard, despite some having been there for up to 20 years.